Bernie Ripoll (Oxley, Australian Labor Party, Shadow Parliamentary Secretary for Industry and Innovation) Share this | Link to this | Hansard source

Housing affordability has never been worse. Many young Australians have given up on the dream of homeownership. The average Australian first home buyer now pays $2,300 per month to service a mortgage, meaning they need a six-figure income just to meet their mortgage repayments. The March 2007 quarter HIA-Commonwealth Bank housing affordability index is at its lowest since the index was established in 1984, and it is 10 per cent lower than it was at the same time last year. This is the second consecutive quarter when the affordability index has been below 100, and median house prices rose by 1.5 per cent in the March quarter alone.

Rents are also increasing in many parts of Australia, making it harder to make ends meet and almost impossible to save a deposit for a house. As if that were not enough, more families are losing their homes. Mortgage repossessions under this government have doubled over the last few years. The new interest rate reality means that Australians are paying more than they ever have to service their mortgages. Homebuyers need to borrow so much more because houses are so much more expensive. In 1996 the average house cost just three times the average annual wage, but today, even with very high wages, the same house costs seven times the annual wage.

At this rate, if the Howard government is re-elected, young people can forget about ever owning a home. While we were relieved to see the Reserve Bank of Australia recently maintain interest rates at their current level, we must not forget that there have been four consecutive interest rate rises since the last election and eight since this government was elected. However, stable interest rates over the last quarter did not prevent a rise in the monthly home repayment needed on a typical first home mortgage, which increased from $2,350 to $2,387.

Mortgage repayments accounted for more than 30 per cent of an average homebuyer’s income in the December 2006 quarter. Projections from HIA show that, if nothing is done, housing affordability for many will not be restored until 2022. Even these projections assume strong wage growth and interest rates remaining where they are globally today. Interest rate repayments on a $300,000 mortgage have increased by $2,346 per annum since the last election alone. Interest rates can only be controlled through good economic management, but the Howard government has been relying on luck and the global resources boom and has not done enough to ensure Australia’s future prosperity.

That is why Labor has committed to future prosperity by investing in skills, through education, as well as infrastructure and broadband. Labor is considering innovative policy proposals to tackle the housing affordability crisis and to help low-income families into homeownership through rent to buy and shared equity schemes and through encouraging private investment and affordability in the rental market. We believe every Australian deserves a secure, affordable house. Housing affordability is the untold story of how, under the Howard government’s watch, something as basic as buying your first home has become a distant memory. (Time expired)