From what I know, it's not that simple. The housing market over there has been flooded with homes to the point where house prices have fallen substantially. So that $500,000 home ends up being only $280,000, which is a major loss to the banks. Our market is in such great shape compared to the US that it's hard to imagaine selling a home for a loss. But that's exactly what's been happening over there - combine interest rates to climb another % and fuel to rise to $2 a litre, you'll have an instant collapse of the Australian housing market - particularly in the outer suburbs.
