Page 886 - Week 03 - Wednesday, 2 April 2008
The website’s mortgage calculator tells us that, with a full 10 per cent deposit, they will still wind up paying a mortgage of $2,110 per month for a 30-year loan.
We can put this into perspective when we consider that, for an average Canberran, for an EL1 in the public service on $75,000, this would consume almost half of their after-tax pay. So we are not dealing with low-income earners. Someone on $75,000 is not considered to be a low-income earner. They have done reasonably well but they are certainly not wealthy. In order to buy the cheapest house in Tuggeranong, they are now faced with paying half of their after-tax income in servicing their mortgage. The median sales price for Banks in 2008 is $380,000. Mr Stanhope himself, in his March media release, said:
It is generally accepted that housing stress occurs when more than 30% of the gross family income is required to pay for housing.
So we know that thousands of Canberrans are in mortgage stress. It is not just low-income earners; be they low-income earners, middle-income earners or even relatively high-income earners, they are working hard, and much of that is in order to pay their debt.
The problem that has been created by this government is not one that can be fixed overnight. It simply cannot. We have long advocated that some time needs to be taken, because we do not want to see distortions in the market in responding to the crisis that has been created by this government. They squeezed it on the one hand, but we on this side will not be advocating, in response, any flooding of the market. But over a period of time, we do need to see more land ready to come onto the market quickly. We do need to see competition. We want to see genuine competition. Whether it involves the LDA in its current form or whether it involves private sector developers, we need competition in this market.
This government has deliberately stifled that competition. We have only recently seen it pull back, to some degree, from being the monopoly developer of residential land in the territory. The record, despite the assurances of the planning minister when the agency was set up, has been that it has made housing less affordable for young Canberrans. So we do need to see land that is ready to respond to demand, and that means ready to respond when there is a slowing in demand. At the moment, with the mismanagement of this issue by the government, because of the significant gaps between when a subdivision is announced and when it actually comes online, not only do we see dangers on the upside in terms of artificially pushing the price up because of the delay in things coming to the market, but also, if things do turn around, if we do see a slowing of our economy as a result perhaps of public service cutbacks at a federal level, and we have got this massive delay in the release, there is a risk to the other side.
The way that this government has managed land release in the territory has caused a lot of pain to thousands of Canberrans at the moment. Potentially, if things were to slow down, it could actually cause pain the other way. We do not want to see either situation occur. We do want to see over a period of time a much more sensible management of land supply and land development in the territory. We want to see