mak i didn't say that interest rates were a direct link to affordability. i was trying to point out that you cannot compare interest rates of today with interest rates of 20 years ago becasue of the rest of the economy, here and overseas. Interst rates are too high and are haning an additional impact on affordability because of theos price rises. Taking your example a $400,000 house has risen 2.5 times. = $1m (where do you live?) A 10% deposit thus has gone from $40,000 to $100,000 and the debt has increased from $360,000 to $900,000. Even if interst rates were 10% and they have fallen to 5% the interest on the first is $36,000 wheras on the second it is $45,000. So, even though the interest rate has halved, becasue of the prices you are still paying $9,000 more for the same house.
Our interest rates are too high - income and wages are not keeping up
