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Tuesday, 1 February 1994
Page: 11

Mr TANNER —My question is addressed to the Minister for Housing, Local Government and Human Services. In view of the positive economic outlook, can the minister inform the House what the implications are for home ownership prospects in Australia?

Mr HOWE —In answer to the honourable member's question, prospects for the housing industry in this country in terms of affordability are very good, for a number of reasons. We have seen allusions to those reasons from both the Treasurer and the Prime Minister today. Underpinning the affordability of housing in this country has been an inflation performance on the part of this country which is second to none.

  As a result of sustained low inflation, affordability in the housing sector is at its highest level in nearly nine years. Mortgage interest rates have fallen from a high of 17 per cent to 8.75 per cent. Today a family in Sydney requires an income of $35,724 to meet the average loan payment; whereas 12 months ago that same family required an income of $39,285. The expectation of low inflation is giving people a security to invest in housing.

  Over the last two years, this current financial year and the year before, we have seen record levels of housing activity in this country. There were 161,000 starts last year and we expect 157,000 this year. More choice of housing is being offered in the housing industry at this time compared with any other time in our history. Against all expectations, we have seen over the last several years a very sharp increase in medium density housing in the inner cities of Sydney, Melbourne and a number of the other major capitals. We are seeing much more affordable housing in Green Street type development. People at the lower end of the market have been able to get into housing that is appropriate and able to completely meet their needs.

  Despite the Jeremiah predictions that we hear from the opposition, the level of home ownership in Australia is currently 72 per cent, higher than almost any other country in the world. Compared with the United States, Britain and most European countries, Australia stands with extremely high levels of home ownership and levels of affordability that historically have not existed in this country for a very long time. When the government talks about its economic performance, a new paradigm in the Australian economy and new conditions that operate, that has implications in terms of domestic activity, people's quality of life and, clearly, access to housing and home ownership.

  In answer to the honourable member's question, economic activity is reflected in the housing industry; affordability is standing at very high levels historically; the choice of housing has never been greater; and the quality of life of Australians is being improved as a result of the government's extremely sound management of the economy in difficult economic circumstances.