Sorry but I just can't see the whole Armageddon mindset here....

Sorry but I just can't see the whole Armageddon mindset here. I'm a young guy in the banking/lending sector and in Perth. From my experience, first home own buyers are plentiful and have been heating up the market for some time now.

The notion that when rates rise there will be a substantial amount of defaults due to high leveraged facilities doesn't sit with me. Firstly although rates are just below 5%, in all cases the banks will apply at least a 2% interest rate at principal and interest repayments. As soon as rates go higher you can bet your bottom dollar most homeowners will lock in at a fixed rate that won't be anywhere near 7%.

Secondly the applications for loan facilities in mortgage insurance territory are heavily scrutinised across the board. Applicants must show a strong ability to service the loan.

In perth we are 3k short in supply, however there is plenty coming onto the market which will more than likely cool down prices.

The only way I see things getting messy is if there is a massive jump in unemployment, people talk about the resource sector dying down but don't seem to mention the massive LNG projects in development.

Long term, the value of land will always increase as does the population.