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HOUSING AFFORDABILITY IS THE ISSUE

Interest rates might be the lowest ever, but so are home affordability rates and future generations are being locked out of home ownership, says national housing peak body National Shelter.

And that also means more pressure on low and moderate income earners in the private rental market, and more pressure on social housing, says National Shelter.

During the last decade average house prices relative to income have almost doubled, said Paul Pendergast Chairperson of National Shelter, and the proportion of first home buyers has fallen by about 30 percent. Average monthly payments on new loans have increased by about 50 percent.

This means private rental housing is becoming a permanent option for many people.

However while supply has expanded at the top end of the market, it has actually fallen by 15% at the bottom end, forcing low income people out of private rental and on to crowded public housing waiting lists.

At the same time over the past decade there has been a 25 percent decline in commonwealth funding for public housing. This translates into a 20 percent decline in opportunities to rent public housing.

More than 1.5 million lower-income Australians are now in housing stress, paying more than 30 percent of their income in rent or mortgage costs, said Mary Perkins Vice Chairperson National Shelter NSW.

Do not believe politicians when they just talk about interest rates. We are talking about a crisis in housing affordability.

While escalating prices have benefited existing home owners this wealth has been acquired at the expense of many first homebuyers now and in the future. This is a crisis that will deny home ownership to future generations.

It is a crisis that will force people on low incomes out of the private rental market and on to already-overcrowded public housing waiting lists.

In addition the income criteria for public housing are now so tight that many people will be locked out of both the private rental market and public housing as well. There is nowhere for them to go.

This is the housing issue of the decade, but it is not getting a run. The housing issue demands a response from our political leadership.

[SOURCE: MEDIA RELEASE - NATIONAL SHELTER INC - AUGUST 31 2004]