The Reserve Bank of Australia’s decision to cut interest rates by 0.25% to 4.25% is welcome news for the 36% of Australian households with a mortgage, however it won’t do much for the 29% of households who are renting, or the 32% who own their home outright.
AAH Campaign Manager Sarah Toohey said that the interest rate decision wouldn’t help those striving to buy a home either.
“Mortgage repayments are a function of interest rates and how much people have to borrow, so interest rates are only half the picture. The fact is that people have to borrow more just to get into the housing market. Governments need to look at the structural problems that drive up house prices.” said Campaign Manager Sarah Toohey.
“According to data from the Reserve Bank of Australia, households are paying more of their income on housing interest payments now than they were back when interest rates were at 17%. That’s because households have had to borrow more to get into the housing market”.
“Until we implement a range of measures that actually reduce people’s housing stress and make housing more affordable, we will continue to see people under pressure across the housing spectrum.
“The RBA’s decision to reduce interest rates is like greasing just one cog in an entire engine that needs re-oiling. We have to make sure we are addressing the real issues that will help people to make their dream of home ownership an achievable and less stressful reality,” said Ms Toohey.
Australians for Affordable Housing is a coalition of national housing, welfare and community sector organisations to highlight the problem of housing affordability in Australia.
Media enquiries: Stephanie De Campo, 0432 828 004
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