He noted the recent years of ultra-low interest rates have encouraged households to ramp up the national debt-to-income ratio to a record. House prices and household debt has reached unprecedented highs and house prices could crash. With typical home mortgage rates around 5 per cent, that is quite a lot, leaving large swathes of Australia vulnerable to higher interest rates. There is only one way to bring house prices back to a sustainable level and that is to increase the supply of housing. Until it happens we are all captive to the vagaries of international interest rates and the US economy in particular.

Source: New Zealand Herald March 12, 2017 00:45 UTC