The United States is a quirky place, and its mortgage industry is no exception. Instead of borrowing at variable rates like we do Down Under, when you take out a mortgage in the good ol' US of A you’re generally locking in the rate for 15 or 30 years. Now banks borrow short and lend long – how on Earth do they manage the enormous risk of maturity mismatch that this model entails?

There is no doubt that Australia has plenty of problems. Inflation is still running hot, rental properties are expensive and ridiculously hard to find, and profits for some companies – especially those in the mining sector – are, or at least were recently, at/close to record highs. Meanwhile, real wages are declining and the nation’s productivity over the last decade (the key driver of long-run real wages growth) was at a 60-year low.

Last week around 500 residents of the small town of Dunsborough in Western Australia turned out to a rally protesting against affordable housing: “Several high-rise retail and housing projects are being developed in the town after receiving initial approval from the local council…

The Greens Member for Griffith, Max Chandler-Mather, took to Twitter to explain to people why “building luxury apartment towers makes the housing crisis worse”. According to Max: “Every time valuable inner city land is handed over to luxury property developers we lose another opportunity to build good medium density public and affordable housing.

The Australian government wants to create affordable housing. An admirable goal, although the means leave a lot to be desired: “The $10 billion Housing Australia Future Fund will provide ongoing investment returns to deliver new social and affordable homes as well as investments to address acute housing needs. Returns from the fund will deliver the Government’s commitment of 30,000 new social and affordable homes in the fund’s first five years, including 4,000 homes for women and children impacted by family and domestic violence or older women at risk of homelessness.

In March 2020, the Reserve Bank of Australia (RBA) created the $200 billion Term Funding Facility (TFF), essentially a slush fund for banks that locked-in three-years' worth of funding at rates well below what was available on global wholesale markets. Given the uncertain times, one could mount an argument for its creation – COVID-19 had just started to be taken seriously and the RBA was concerned about Armageddon.