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Interest rate rise another blow to housing affordability.



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KELVIN THOMSON Media Release from the Shadow Minister for Regional Development and Roads, Shadow Minister for Housing and Urban Development

INTEREST RATE RISE ANOTHER BLOW TO HOUSING AFFORDABILITY 2 March 2005

The Reserve Bank of Australia’s decision to lift rates is a vote of no confidence in the Howard Government’s ability to deal with Australia’s economic challenges including the trade deficit and infrastructure investment imperatives.

Shadow Federal Housing Minister Kelvin Thomson says the impact will be a very personal blow for many Australians paying off or trying to get into their first home.

Housing affordability has declined dramatically under the Howard Government and this rise will worsen an already diabolical situation, especially for first home buyers.

The average monthly loan repayment in March 2005 is $1541 a massive 67% increase that equates to an extra $619 per month since the Howard Government came to office in March 1996 when the average monthly home repayment was $922.

The latest ABS statistics show that the average loan size for first home buyers is $210,100.

The impact of this 0.25% rise on the average mortgage first home buyer mortgage will be $34 per month.

Yet an out of touch Treasurer Costello arrogantly claims that interest rates at anything less than than 10 percent should be considered low when Australia’s interest rates are already amongst the highest in the world.

The Howard Government’s re-election campaign was based around a claim that its policies would prevent interest rate rises. The Howard Government has failed Australian families.

This rate rise will increase the mortgage stress experienced by home owners and will further exacerbate the problems for first home buyers attempting to break into the market.

This was borne out by Monday’s HIA New Home Sales figures which showed that housing startups had hit a four year low, falling a further 4.5 percent.

Ends Melbourne 2/03/2005

Contact: Cora Trevarthen 0418-770 484

(19/05)