The speed and extent of this decline came as a shock to many people, although it did follow an earlier very large run-up in prices. It reminded us all that housing prices can, and do, fall substantially. For some people the salutary effect of that reminder has been amplified by lower wage increases and high levels of debt.
Graph 10  As part of the Reserve Bank's efforts to understand how households are adjusting we have been looking carefully at the data on mortgage repayments and I would like to share these updated data with you.