I had a house that didnt rise in value for 11 years. During that time interest rates hit 17%. The only impact interest rates have on affordability is your capacity to pay your monthly mortgage. Sure it hurts some but there are plenty these days who want everything without working for it. I see so many people build the biggest houses possible and get the biggest loan they can possibly get when interest rates are low and then struggle to pay off their mortgage as interest rates rise. What happened to building up to it. Buy small, pay off, move up. Same as location. You just can't expect to live in the same proximity to the city as 20 years ago in a growing population. Land just doesn't appear out of nowhere. You have to live where you can afford and move up. I don't see any way around this no matter what the interest rates.
One of the reasons Australia is in a strong position is because of its higher interest rates compared to elsewhere globally. Money is coming into the country which benefits certain industries. Of course thee are down sides too.
As I said before from my personal experience interest rates are relatively low right now. Sure they could be lower, but they could also be higher. Extremely low intertest rates however do usually signal problems. I'd much rather our position than that of the US right now.
If we want to look at housing affordability, its not interest rates we need to focus on, its the increased supply of land (which governments withhold), its making it more difficult for foreign ownership of property, there are many other factors we need to address.
