Australians for Affordable Housing has welcomed the Reserve Bank’s interest rate cut today but warned that without serious housing reform, like that delivered in today’s ACT Budget, households will continue to struggle with high housing costs. _
“Rather than relying on interest rate cuts, the ACT government has started real reform that will improve housing affordability in the long term by phasing out stamp duty and replacing it with a broad based land tax” said Australians for Affordable Housing campaign manager Sarah Toohey.
“This is great new s for housing affordability in the ACT. Not only will it cut the up front costs for people buying a home, it will help to reduce the kind of insane house price inflation that has locked first home buyers out of the market for so long.
“While today’s rate cut will be welcome news for the third of Australian households who have a mortgage, it doesn’t fix the structural problems in our housing system.
“If the rate cut is passed on in full by the banks, weekly repayments on the median priced home in Sydney will fall from 66 per cent of Average Weekly Full Time Earnings (AWFTE) to 65 per cent, that’s not going to deliver housing affordability.
“Even in cities such as Melbourne where price have fallen recently, they’re still historically high. The rate cut will reduce repayments on the median priced home in Melbourne from 62 per cent of AWFTE to 60 per cent, that’s an unacceptably high cost burden for any family.
“Interest rates are just half the story when it comes to housing affordability. We need governments to tackle the structural reforms, like those started by the ACT Government in today’s budget to make sure everyone can get a roof over their head they can afford.
Media contact: Sarah Toohey, 0427 563 989. Follow AAH on Facebook at www.facebook.com/housingstressed and Twitter: @housingstressed
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