According to Prime Minister Kevin Rudd, there is a new realisation that the dream of owning a home in the suburbs is one that is more difficult now than ever before. He warns that there may be a rough road ahead. Even so, it is possible that yet another increase in mortgage interest rates is likely.
Particular concerns include the cost of mortgages, the rising costs of food, petrol and rents. Inflation has soared to the highest level here in six years and economic growth will fall well below expectations for the coming decade.
Reports are showing that the national mortgage belt is being pulled tightly by lenders, and that some families are even skipping meals to help pay monthly mortgage payments. The country also faces a drastic shortage of housing, and many are alarmed at the near impossibility of first time home buyers actually getting into a house because of the interest rates.
Perhaps the worst news of all is from the National Centre for Economic and Social Modelling, which indicated that more than 1.1 million lower and middle income families were now spending 30% or more on their pre tax income on housing costs. This includes costs of rents and mortgage repayments.
The Prime Minister did however, offer some good news, about some 100,000 low cost rental homes which would be built over the next ten years under a very specific federal plan, with the hope of helping families that are struggling to meet housing costs.
