Divided interest rates per state, hypothetical?

I kinda like the idea of each states having different interest rates. Do you guys think it will happen one day?

Sydney, Melbourne home owners have Perth to thank for low repayments

 

No.

 

It doesn't make sense from a monetary policy perspective. Capital can move around quite easily, so it won't really work either.

The same article could be said in reverse when the mining construction boom was in full swing. Dollar was high too, so non mining states found it increasingly difficult here too.

Its partly why monetary policy is a blunt tool.

Its up to state govt's to fill the void. There are equalisation forces at play between states that help state govt's do this (GST distribution).

 

No. You can't have that in a federal union. Even the US where states have much more independence than aus has a single IR. Different IR will bring in central banks of each state and that will distribute the policy too much and will drift the states apart.

 

And there is a huge difference between places within a state.

Broken Hill or Bourke cannot be compared with Sydney regarding real estate.
Marg