Thanks for all the responses, very interesting argument. It is really quite divided out there, both on the merit on Stephens actions/words and the potential results of higher IR's. I am a FHB. I think I will wait it out a few more months and keep saving my deposit.
I disagree with those who are not supportive of Stephens, as a FHB I think what he is doing is really important to help young families hopefully be able to have our own home over our heads, rather than paying an investors rent (the great Australian Dream!).
Sure, higher IR's will mean higher repayments, but at the moment for alot of FHB's like me it is unnafordable to live within an hours commute of work (I work in the Sydney CBD), so when working 10-12 hour days, not much time left over to eat/spend with the family when you tack on 3 hours of commuting and 7 hours of sleep - too bad the infrastructure in Sydney is so poor and that all the taxes State Governments generate from property aren't put to better use!
I am hoping that things become a little more affrodable as IR's increase so that I can afford a place that allows me to spend more time with the family.
Apparently there aren't too many FHB's (relative to last year) making up the market now, so if a few more IR rises, this may deter investors and make things a little more affordable.
If not, oh well, can re-assess in 3-6 months time! Maybe Stephens is wrong and prices will keep going and it is an easy path to riches (for those who are already asset rich - not for FHB's)!
Good luck to you all.
SYDB
Edit: Sorry, to be 100% frank about my circumstances, I am not paying an investors rent (and never will). We are living with the in laws until we can afford to buy. Not optimal from a lifestyle perspective, but hey, it's a sacrifice we have to make. I will never, ever, pay someones mortgage for them. I feel lucky to have the family support to be able to make this decision, others aren't so lucky and are forced to rent due to affordability, some choose to as well, which is perfectly fine, but we don't want people marginalised into becoming long-term renters - a society of serfdom with Landlords vs the have nots. Well, I don't think it's what we want, some of you investors out there may disagree!
SYDB