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Costello's double denial on housing afford ability and interest rates.

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WAYNE SWAN MP Federal Labor Shadow Treasurer


Peter Costello has today delivered a mind-boggling double denial, first denying that housing has become unaffordable, then insisting that interest rates are low.

In a press statement today, Peter Costello claimed that:

In order to keep housing affordable to young Australians we need to … keep interest rates low.

It is deeply disturbing that Mr Costello thinks housing is currently affordable, despite now overwhelming evidence of a spiralling housing affordability crisis:

• The Commonwealth Bank / Housing Industry Association Housing Affordability Index is at a record low, having fallen 40 per cent on Peter Costello’s watch. • Households now need an income of $115,000 to keep up with mortgage repayments on the average loan for a median-priced home across our capital cities - up from $47,000 when Mr

Costello became Treasurer. • The average home now costs seven times the average annual wage, up from four times the annual average wage in 1996.

Peter Costello’s ongoing denials of the housing affordability crisis are yet more proof that he is simply not listening to Australian families and the financial pressures they are facing.

Perhaps more disturbing is that Mr Costello still thinks interest rates are low. This is despite:

• Census data showing over 500,000 Australian families now in mortgage stress - that is, losing over 30 per cent of their gross household income to mortgage repayments. • This Census data - showing one in four Australian households with mortgages are now in mortgage stress - does not even include the impact of the most recent two interest rate rises. • Reserve Bank Bulletin data showing that households are now losing a record 9.5 per cent of

their disposable income in mortgage interest repayments - the highest in our history.

After eight rate rises on his watch - despite promising to keep rates at record lows - and now record levels of mortgage stress, it is clear Mr Costello has completely lost touch with the realities of Australian household budgets.

16 July 2007

Contact: Matthew Coghlan 0415098050