It has been a little more than two years since the Reserve Bank of Australia raised interest rates.

A two year-long reprieve allowed for family budgets to be more flexible and gave us all an opportunity to tackle our debts and maybe even get ahead of mortgage repayments. That’s all come to a screeching halt.

The RBA’s latest rate rise might look like a neat 0.25 percentage point adjustment on a graph, but in Kiama it lands particularly hard.

As we all know, Kiama is one the most expensive places to buy a home in regional NSW, with a median house price around $1.5 million.

For many owner‑occupiers, that translates to mortgages comfortably above the state average of about $828,000 in NSW, with plenty of local families carrying loans in the $900,000 to $1.1 million range.

On a $1m mortgage over 30 years, a 0.25 percentage point rate rise typically adds around $150 a month to repayments, and households with larger debts will feel even more.

These are not abstract figures for investors in distant capitals - they are dual‑income parents in Minnamurra and Jamberoo, hospitality workers in town, and health and education staff commuting up and down the coast.

When your loan is already stretched to match a premium coastal market, every extra dollar in interest slices directly into groceries, kids’ sport fees and the chance to put anything aside.

It continues to challenge the idea that locals can stay local, particularly as the next generation with young families struggle to balance housing with child care and a commute to employment hubs.

Kiama households earn a little above the regional NSW average, at about $1,572 a week, but that uplift is quickly swallowed by housing, food and utilities.

Rents have climbed as well, with median house rents around $800 a week and unit rents near $650, leaving both tenants and new mortgage‑holders exposed as rates rise.

Nationally, the cost of living is still rising faster than wages for many households, driven by housing and supermarket bills that never come down once they go up.

Around town, that pressure shows up in local business closures, quieter café mornings outside peak tourist weekends, trimmed grocery baskets at IGA and Woolies, and local families delaying renovations or trading down holidays to a single night away instead of a week.

Kiama’s economy remains anchored in tourism, hospitality, construction and services, with tourism alone supporting close to a thousand jobs and forming a major pillar of local employment.

Regional plans emphasise growth and resilience, but service‑based and visitor‑dependent economies feel rate rises quickly as locals cut discretionary spending and visitors shorten stays.

The paradox is that rate hikes aimed at cooling inflation risk chilling the small businesses that give Kiama its character: the family‑run restaurants, tradies dependent on home‑improvement work, and the hospitality and tourism operators that rely on city guests already stretched by their own mortgages.

While this rate rise was predicted and pundits were calling this rate rise the least-worst option, it is certainly not how we wanted to ring in the second month of the new year.

We just hope the RBA and Government get a handle on the economy and we do not see successive rate rises to come.