COLHOUN Based on the stress tests APRA [the Australian Prudential Regulation Authority] and all the other regulators get the banks to do every year, a scenario of really big falls in GDP and much higher unemployment should have produced a very different housing-market outcome than what we have seen. This tells us how important government and reserve-bank support has been.

I was really surprised to hear the RBA governor say rising house prices would be positive for financial stability. I thought that was unusual.

We are still a bit cautious on housing when we see support measures run off. But house prices have done well around the globe even where there hasn’t been this much support. They are doing very well in New Zealand, too. Very low interest rates are clearly an important factor.

The other thing is that while some of the shocks we are dealing with might be prolonged, such as those that require international borders to reopen, others should rebound relatively quickly.

I am sure people will go on international holidays when it is safe to do so, and I am also sure international students will come back here and influence rental vacancy rates. Markets are behaving as if this is some form of temporary crisis rather than a really nasty recession.

EVANS We are very positive about the housing market, once we get over the deferred loan issue. The information on deferred loans is very encouraging, too. People are starting to restore their repayments and the problem now seems to be mainly in Victoria, so the issue of too many stressed loans going onto the market next year seems to be fading.

Once we get through that problem we will end up with very low interest rates and a government committed to addressing the jobs issue ahead of an election. I think we will be in for a very strong couple of years in 2022 and 2023.