Are artificially low base rates creating an artificial real estate market?

[totallyproperty]

While UK base rates remain at 0.5%, and many other countries around the world are also operating on low base rates, it does beg the question as to whether artificially low base rates are creating an artificial real estate market. There is no doubt that cheap finance has helped to fuel the ongoing property craze across parts of Europe and North America and will likely continue to do so for some time to come. Even the UK, where the economy has been stronger than many around the world, is still expecting base rates to remain at 0.5% until at least 2015. There is also the added complication in the UK of a forthcoming general election in 2015 and the fact that the coalition government would prefer base rates to remain low, property markets remain buoyant and a feelgood factor among voters.

In your view, do artificially low base rates create problems for the future and the real estate market in particular?