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Peter Costello's bubble trouble.



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AUSTRALIAN LABOR PARTY

HON. SIMON CREAN MP 10 December 2003

Federal Labor Shadow Treasurer

PETER COSTELLO'S BUBBLE TROUBLE

Peter Costello's wilful neglect of the housing sector continues to spell trouble for Australian families. However hard Peter Costello tries, the following facts don't lie:

É Figures released today by the Australian Statistician show that the proportion of first home buyers in the market in October remained at a record low of 13.4 percent (see chart attached). Under John Howard and Peter Costello, young Australians are being priced out of the great Australian dream of owning their own home.

É Today's Westpac Melbourne Institute survey of consumer sentiment also reveals that ‘whether it is now a good time to buy a home index’ has fallen to its lowest level since the early 1990s, falling 23.4 percent in the last three months to be 30 percent lower than the same time last year.

É Just a few weeks ago, the Commonwealth Bank-HIA report on housing affordability revealed that record household debt and rising house prices had resulted in housing affordability for first home buyers in Australia falling to a record low.

With two interest rate rises in the last two months and the highest taxing Government in Australia's history, Australian families have never been under greater financial pressure.

É Monthly mortgage repayments on a standard loan today are around $1,340 - up around $400 per month under the Howard Government É Reserve Bank figures now show that mortgage interest payments chew up more of the household budget than ever before.

Despite warnings of his housing bubble from the IMF, the OECD, the Secretary of the Treasury, and the Governor of the Reserve Bank, Peter Costello has continued to ignore the housing sector and placed Australian families under greater financial pressure.

With trouble already brewing with reports of a fall in investor unit prices and the collapse of companies in the Henry Kaye group, all Australians now know that the trouble with Peter Costello's housing bubble is Peter Costello.

Contact: Stephen Spencer 0419 695 435 www.alp.com

First home buyers being priced out the great Australian dream

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Jul.1991 Dec.1991 May.1992 Oct.1992 Mar.1993 Aug.1993 Jan.1994 Jun.1994 Nov.1994 Apr.1995 Sep.1995 Feb.1996 Jul.1996 Dec.1996 May.1997 Oct.1997 Mar.1998 Aug.1998 Jan.1999 Jun.1999 Nov.1999 Apr.2000 Sep.2000 Feb.2001 Jul.2001 Dec.2001 May.2002 Oct.2002 Mar.2003 Aug.2003

F irst h

o m

e b

u yers to all b

u yers (%)

Source: ABS 5609.0