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Thursday, 14 May 1987
Page: 3209


Ms MAYER —My question is directed to the Minister for Housing and Construction. What is the current level of lending for housing, and what impact will the economic statement have on the housing industry?


Mr WEST —Lending for housing was very strong during the month of March. Figures out today show that all significant lenders lent more than $1,000m. The component from the savings banks was $817m, giving an annualised rate of $9.8 billion. I think that the House, even the Opposition, would agree that that was a very strong performance. I am also pleased to say that the proportion of loans going to purchase new housing has shown a moderate increase during March. That strong lending activity has been underpinned by very strong growth in savings banks deposits, and during March, the seasonally adjusted gross figure was $866m, and that means that savings banks deposits were up 16.5 per cent for the year to March.

All that activity, plus the measures that we announced in the March housing package-the guarantees for public housing funding and the increased income limits for the first home owners scheme-will, I am fairly certain, increase housing activity during the rest of the year. For instance, we predict that 4,500 extra starts-a conservative estimate-will result from the first home owners scheme changes.

The second part of the honourable member's question related to the economic statement made by the Treasurer last night. I believe that it constitutes very good news indeed for the housing industry. It creates the economic environment for general interest rates to continue to trend down, and I believe that, in due course-and as I will show in a moment, this view is shared by key figures in the housing industry-that will be reflected in reduced housing interest rates. I shall quote from Mr Alan Cullen--

Honourable members interjecting-


Mr WEST —The Opposition does not like to hear it, but this is what the leaders of industry and the banks are saying about the Government's economic statement. Mr Alan Cullen from the Australian Bankers Association said:

The Government is therefore to be commended for the initiatives it has taken. The adoption of this strong fiscal approach to our economic difficulties should act to moderate interest rate . . . pressures.

An even stronger endorsement comes from Mr Ron Silberberg, the executive director of the Housing Industry Association. He said:

The mini-Budget brightened the hope for lower interest rates . . . There is now the real prospect of the recent falls in commercial interest rates spreading to the home mortgage sector . . . The Government is to be commended for making the largest package of Budget savings in the last 30 years.

I can only add that what I have said to the House is reflected today in the bank bill rates, which at 14.1 per cent are at their lowest level for the past three years.