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Falling property values across a swathe of Sydney’s mortgage belt suburbs have thrust another knife into the heart of families struggling with the latest round of interest rate increasesThis revelation came as Treasurer Wayne Swan warned Australians they will need to exercise restraint and tighten their belts in 2008 in the face of higher inflation and likely further rises in interest rates. Mr Swan said latest Treasury forecasts pointed to a period of prolonged price rises across the economy.They suggest we need to prepare for a period of elevated inflation - that’s the legacy that Peter Costello has left the Australian people,” Mr Swan said, in an exclusive interview.

“I think we have an inflationary challenge on our hands and that requires restraint from all sections of Australia, from corporations to unions and government.”

The triple dose of bad news means battling families mortgaged to the hilt face higher loan payments, increased grocery, petrol and living expenses - and may now have negative equity in their home, where the loan exceeds the value of their property.

Sounds like stuff we all heard in the 80’s and early 90’s…

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