I think that in the next two years, interest rates will start to creep up and while it will start slow, house loans are 30 years long. When people have overpaid on their houses and some default, the bubble portion will reduce quickly and the value of assets won't cover the debt liability. This is fine if not forced to sell.
In Australia at least, the parents injecting cash to extend loan range will likely lead to them losing their gift, as many of those who they have gifted to are not necessarily financially secure or responsible themselves, as generally, they are younger. This is all hearsay for now, but I suspect in the next five years, we will start seeing some pretty volatile times.
I've heard professional investors say that only an increase of 150 basis points or 1.5% would be required to wreck the sovereign bond market. If that is allowed to happen, we will have much bigger problems than slightly more expensive mortgages.
I'm afraid the current situation is not as rosy as that. Most people don't realize there is much less room for interest rates to go up than before. By the way, very low bond yields are the root cause of why institutions are buying Bitcoin in the first place. It is in times like this when bonds yield little to nothing that investors are forced to invest in higher-risk assets than usual. In a normal macroeconomic situation, the entire cryptocurrency sector would hardly even have got off the ground.
1.5% isn't much. It is going to get pretty volatile across many sectors. The housing component is only one facet, it is going to compound in other areas also. Currently, governments seem to be celebrating the "recovery" but I think it is a little bit of premature self-congratualtion.
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It certainly isn't. Bond yields can be kept down artificially without any restrictions. Problems will emerge elsewhere.