Let ke explain what happens next;
Investors exit the market โ> house prices fall โ> mortgage arrears rise โ> bank share prices fall โ> bank credit quality falls โ> bankโs borrowing costs rise โ> banks increase mortgage rates โ> unemployment rises โ> banks tighten lending standards โ> your grandkids cannot get a loan
They move in with youโฆ
House prices drop, mortgages go
Into arrears, bank profits fall, lending standards tighten, credit quality declines, Aust banks pay more for term borrowing, they increase mortgage rates to defend profit marginsโฆ. Erm, your young familyโs first home just got out of reach. The law of unintended consequences (or just plain stupidity) ?