Don't we now have wage deflation in this country. Last Quarter wages went up less than inflation. http://www.abc.net.au/news/2014-02-19/abs-figures-show-annual-wages-growth-slowest-on-record/5269480 Jobs are being lost, and its hard to pick another one up (if at all) at your same salary. Others are too scared to ask for pay increases, otherwise they will be first in the firing line.
As Scotty B says, it is simple. Citizens need to spend on consumption, not funnel in away into mortgages. Look around you - how many jobs are being lost. Look at all the business either closing up or off shoring. Think of the employees that no longer have a job and can't afford that mortgage.
And speaking of rents, scrubroad rents are actually getting cheaper in many parts of the country. Melbourne CBD is down 21% alone.
