Simon Kustenmaha

Well, that's the result, I guess, that many economists were hoping for a relatively low increase in order to slow the negative effects on the mortgage owners in particular.

It certainly is.

And we've seen this before, though, in the Western Australian market, where at the height of the mining booms, lots of people purchased very expensive homes and they went into negative equity for years.

probably four or five years, if not longer, which is psychologically an absolute nightmare.

But in the long run, if the market continues to recover and house prices continue to go up, then it was just an uncomfortable period of time and the property ultimately will still have turned out as a big win.

But that's easy to say with the power of hindsight rather than when you're stuck in the moment.

Exactly.

And that's the problem with the current mortgage holders that we are in a market where almost all rates are variable or almost most rates are variable.

And that then means that you are essentially a victim to those rate changes that might come when a market where you already sign up for

30 years, you sign a rate and it's valid for the next 30 years as in the US, you're not as much of a victim to the changing circumstances over those three decades.

It might all play out to be the same over the period of a long loan of 30 years.

But again, with a fixed term, you don't have those absolute strong pain points as we have at the moment.

That said, at the moment, we are not on crazy high interest rates.

The interest rates are still, in the long-term international comparison, relatively low.

They're not outrageously high figures.

It's just that we got used to very, very low interest rates over a very long period of time in Australia.