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“More money going on servicing a mortgage means there is less to spend elsewhere, dragging on economic growth,” said Paul Dales, chief Australian economist at Capital Economics. “It won’t take many rate rises for indicators to start flashing amber and red for more-indebted households.”
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Politicians, meantime, have offered only superficial solutions. Former Treasurer Joe Hockey said buyers struggling to get into the market should simply “get a good job that pays good money.” Deputy Prime Minister Barnaby Joyce said people priced out of Sydney should have the “gumption’’ to move to rural areas like Charleville in outback Queensland -- where houses are about one-sixth the price of Sydney, but youth unemployment in the region is the highest in the nation.