Next page . . . . Previous page . . . . Speeches . . . . Contents . . . . Debates(HTML) . . . .

Legislative Assembly for the ACT: 2002 Week 6 Hansard (14 May) . . Page.. 1540 ..

MR WOOD (continuing):

To be precise about this, it might be fair to indicate what is meant by affordability. The task force on housing affordability I have set up has given this definition, which I think is a good one:

A situation that conveys the notion of reasonable housing costs in relation to income, that is, housing costs that leave households with sufficient income to meet reasonable living costs such as food, clothing, energy, medical care, and education.

Our housing task force has decided that the group within this community most likely to have housing affordability issues are those households in the bottom 40 per cent of income earners, who pay 30 per cent or more of their gross household income in housing costs, whether rent or mortgage payments. That gives us some context as we talk about affordability.

I would like to point out a couple more worrying signs about housing affordability in the ACT. The average size of a home loan has increased by 8.5 per cent recently to $162,167. That is pretty hefty, isn't it? Average monthly repayments have increased by 3.8 per cent to $1,056.

Yet concurrently median weekly family income has fallen in the ACT by 0.9 per cent. On top of this, reflecting the increase in the size of a home loan, over the last 12 months house prices in Canberra have risen by 22.9 per cent-a remarkable rise. That is great if you own lots of houses.

Mr Cornwell: Indeed.

MR WOOD: Indeed, Mr Cornwell. But not so great if you cannot afford houses and you are looking to rent. That is where there is a significant problem. All the debate about this issue has tended to overlook that problem, which is why I am on my feet now.

It is the view of the Housing Industry Association that locally affordability is likely to continue to fall for the remainder of this year, largely because of that combination of rising interest rates and rising house prices.

All this paints a pretty convincing picture that for many in our community home ownership is increasingly becoming a more remote prospect. Rising house prices are good news for those of us who already own our own homes, but what about our children who may wish to live in the same suburbs as they have grown up in?

What about the home ownership options for lower paid workers, many of whom you might think are in the middle class? They include nurses, teachers, policemen and administrative workers, a supply of which is essential for the wellbeing of a city such as Canberra. I will mention that later too. The scenario of people such as this not being able to access home ownership is already a reality in other parts of Australia.

The recent report released by the Affordable Housing National Research Consortium states that currently no low-income household can afford to purchase an average priced three-bedroom house in any part of Sydney, Melbourne or Adelaide. By "low income", I mean any household in the bottom 40 per cent-not just people in the bottom 10 per cent, who would be considered in severe housing need.

Next page . . . . Previous page . . . . Speeches . . . . Contents . . . . Debates(HTML) . . . .