Housing Affordability

(1) notes:

(a) the pain being felt by Australian families struggling to pay off mortgages due to rising interest rates;

(b) the failure of the previous government to heed the warnings of the Reserve Bank; and

(c) the need for low cost home ownership and reduced entry costs for home buyers as well as a range of rental options for moderate to low income households;

(2) supports the Government's commitment to tackling this problem by appointing a Minister for Housing and by making it a key priority for COAG in 2008; and

(3) welcomes the Government's plan to help first homebuyers break into the housing market with the first-home saver account scheme.

Housing affordability is the most important issue in Australia today. It is the human face of the inflation problem. Tonight, 1.1 million Australians are suffering from housing stress. Last year, 9,751 Australians lost their homes, and tomorrow three families in my electorate will be evicted from their homes. Homeownership, the great Australian dream, is slipping out of the reach of many Australians. This is what we inherited from the former government. This is what we inherited from the people who said Australians have never been better off. And this is what we inherited from the people who last week told us that the Howard government was the golden age of compassion. We inherited this, and we inherited the highest interest rates in 16 years, the second highest in the developed world. This is the unravelling legacy of the Howard government.

With every interest rate rise, more and more people are losing their homes. Nowhere is this a bigger problem than in my electorate of Blaxland in Western Sydney. Blaxland is the mortgage stress capital of Australia. One in two people with a mortgage in Blaxland are suffering from mortgage stress. More homes are repossessed in my electorate than anywhere else in the country. More than 300 homes were repossessed last year and the year before that-and I fear there is worse to come. Evictions have doubled in the last six months. The Bankstown Sheriff's Office is now evicting 15 families a week and, on top of this, house prices have plummeted. Housing prices have dropped by 16 per cent in the last three years. Some families now have negative equity in their homes. They owe the bank more than the house is worth.

In addition, as if we do not have enough problems, ‘sharks' are circling in the neighbourhood, looking to make a profit out of others' misery. Companies have sprung up recently offering to buy your home in less than 10 days for zero fees and with zero commissions, and their targets are the most vulnerable-people who are behind in their repayments and facing foreclosure, people with health problems, people who have lost their job, people who are about to get divorced. One company offers a finder's fee of $1,000 if you can help them to buy a house. Desperate, vulnerable people are likely to make bad decisions, and I am concerned that some people are not getting a fair deal and are getting ripped off. That is why I have asked the Minister for Competition Policy and Consumer Affairs to get the ACCC to investigate these companies-to see what they are up to and whether there is a need for reform. We already know there are dodgy mortgage brokers out there that are ripping people off. Last Thursday, ASIC released a report that gave examples of people being charged up to $24,000 just to refinance their loan. They call it equity stripping; I call it a rip-off. I think it is an area that is screaming out for reform.

People who rent are not any better off. The rental market has been flooded by people who can no longer afford to buy and are pushing up demand and pushing up rents. Average rents have increased by 82 per cent in the last 12 years. In the last three years, rental vacancy rates have halved. In most capital cities, the vacancy rate is now at about two per cent. In Bankstown, in my electorate, it is now about one per cent. One local agent told me that he no longer advertises rental properties. Another agent has 70 people on his waiting list. I met a man at a men's refuge I was visiting a couple of weeks ago; he was living in that refuge for a couple of weeks to give him enough time to save the money for a bond. This is what we have inherited.

Housing affordability has never been this bad. In the last 10 years, house prices have doubled. In 1996, the average home was four times the average wage; it is now seven times the average wage. We have never been in so much debt. In the last five years, the average mortgage has also doubled. That is why interest rates are so deadly. That is why more homes are being repossessed today than when interest rates were at 17 per cent. That is why the great Australian dream has become a nightmare for some and unimaginable for others.

This is why we need to act. It is going to take a lot of hard work, but I congratulate this government for getting started: for appointing the first housing minister in 12 years; for the First Home Saver Account scheme; for a $500 million Housing Affordability Fund to cut the cost of housing and spark construction activity; for the National Rental Affordability Scheme-for putting all of this on the COAG agenda-and, most importantly, for a plan to fight inflation.'