Personally the value of my house has little impact on my general day to day life. My neighbour pays more in rent than I do P & I mortgage repayments to live in exactly the same place. A rate rise would probably make us even but at the end of the day I'm still paying off an asset.
When I bought the delta to a bigger place was around $200k extra, it's maybe blown out to $250k now so a price drop would just make it more affordable to upgrade which is something we'll be looking to do in the next 2-5 years. Unemployment is very low in Sydney at the moment if this changed it'd have a bigger impact than rates in my opinion. I don't know how much of the money floating around Sydney is tied to debt but there is certainly a lot of fat that could be cut from the average persons lifestyle from the cars they drive, the holidays they take and the places they dine out too and how often.
Regardless we are aggressively paying down our debt at > 3 times the standard repayments because no time better to do so than in the current interest rate environment.
