Thought I will share my opinion on this issue combined with some first hand experience, as it seems like the recent hot topic is around how raised interest rate would affect investor's appetite in investing and how increased interest rate will affect the property market. But what I observed is that people were not investing as aggressive now is because of the strict LVR restrictions from the banks that is physically stopping them. The below example will show how it can affect the market: Existing home loan of $500k Interest rate at 4.5% = $1875/month repayment Interest rate increased to 5.5% = $2292/month repayment Difference = $417/month Now lets say the property is now worth $750k LVR 80% = $600k LVR 90% = $675k An extra $417/month repayment is not as vital as not being able to access the extra $175k. It is easier for people to adjust their budgeting to save an extra $96 bucks per week but they are highly unlikely to get an additional $175k overnight for the down payment. So clearly LVR is the "hard" factor that has more controlling power towards high leverage borrowers and to continue to drive the market. Whereas interest rate is a"soft" factor that plays a big part on borrower's psychological level. All the major lenders are heavily advertising their home loan rate. That action tend to divert consumer's focus to RATE ONLY, which I believe the restricted LVR has a much bigger impact and we as an investor should look at lenders that are able to provide a looser LVR policy rather than who offer the cheapest interest rate on the market. I also believe if banks are to further restrict their LVR Policy the property market might dive into a deeper hole as people will be less likely to be able to borrow and those that are living on equity will no longer be as comfortable as they used to be.