Qld homeowners duped by Feds – State Government steps in: Bligh

Two years ago Queenslanders were led to believe that under a Coalition Government interest rates would be kept low – they have been duped, Acting Premier and Treasurer Anna Bligh said this morning.

“Today we have had our third rate rise this year. There have already been rate rises by 0.25% in both May and August this year.

“There will be an inevitable negative impact on economic activity.

“This will also virtually negate the new first home owners’ measures the State Government committed to at the recent State election.”

The rise could mean on average an annual mortgage repayment rise of up to $600* a year.

“For many households, that extra $50 per month represents a significant chunk out of their budgets, and so we would expect some flow-on effects into other sectors of the economy as people reassess their spending priorities.”

The State Government has transfer duty concessions being introduced from 1 January 2007.

“This will lessen the impact on families and first home buyers.

From then the value of a first home for which no transfer duty will be payable will rise from $250,000 to $320,000.

“A couple buying the $375,000 home, if they were first home buyers, would save around $900. This of course is a one-off saving, whereas remember that the increase in interest rates will continue over the life of the mortgage, provided interest rates do not change thereafter.

“Today’s rise means that the first year’s interest rate rise will gobble up almost all the benefit we are offering first home owners.”

In the absence of Federal Government action, Ms Bligh today announced that the State Government would develop a Queensland Housing Affordability Strategy, building on its recent election commitments.

Speaking at a breakfast of the Property Council of Australia's Queensland Branch, Ms Bligh said the Strategy will be developed in partnership with the Property Council, the Urban Development Institute of Australia, industry and local government.

"Clearly the Federal Government has no new ideas to minimise the effect of continuing interest rate rises on Queenslanders," Ms Bligh said.

"The State Government will not stand by and see home ownership put out of reach for average Queenslanders.

"While the Government's South East Queensland Regional Plan ensures there is adequate land available for development in this region until 2026, the Strategy will ensure that land is freed up as needed, right across the State.

"The Strategy will also:

• ensure local government charges for infrastructure in new housing estates are fair, and
• improve processes for development approvals.

"I would expect the Strategy to be completed by mid-2007.

“These measures are yet another step taken by the State Government to improve incentives for developers to increase the supply of new housing, which should keep the price of houses down.

“It is about time the Federal Government matched our Government’s efforts and did something to assist homebuyers rather than just stay sitting on their hands,” Ms Bligh said.
8 November 2006
Media contact: Deputy Premier’s office 322 46900

* $596 per annum, calculated on a Brisbane median house price of $375,600 for September quarter 2006 and a current mortgage rate of 7.8%, as measured by HIA. Also assumes that the rise in official rates is passed on by lending institutions and that the average first home buyer has a variable rate loan for 80% of the house price value.