This is evidenced by the widening gap between the Bank for International Settlements’ debt servicing ratio (green line below), which accounts for principal and interest repayments, and the RBA’s interest repayments ratio (blue line below):Second, the record high (17%) mortgage rates that the baby boomers complain about didn’t last long. A home buyer back then got to enjoy the benefit of a massive drop in mortgage rates over subsequent years and the corresponding massive rise in house prices:Does anyone honestly believe that recent first home buyers are likely to face similar conditions in the years ahead, whereby mortgage rates more than halve and values skyrocket? The opposite is likely to happen whereby mortgage rates could double and house prices tank. Australian households are among the most indebted in the world… The cost of housing as a proportion of an individuals’ income has been increasing over the past 50 years. For example, 37.4% of people born between 1987-1991 own a home when aged 25-29, down from 54.2% for people born between 1947-51.

Source: Stuff May 10, 2022 03:47 UTC