Steve Hutchins (NSW, Australian Labor Party) Share this | Link to this | Hansard source

My question is directed to the Minister for Finance and Administration, Senator Minchin. Is the minister aware that many families in the south-western suburbs of Sydney, who now face increases in their mortgage repayments of $50 or more a month, are also experiencing a fall in the value of their homes? Is the minister aware that people in the suburbs of Campbelltown, Pendle Hill and Windsor have all experienced an average drop of 10 per cent in the value of their homes in this year alone? Is he also aware that experts predict that with today’s rate rise these families face a further 10 per cent fall in the value of their homes? Having given the green light to this latest interest rate increase, hasn’t the Prime Minister ensured that these families will pay more for homes that are worth less?

Nick Minchin (SA, Liberal Party, Minister for Finance and Administration) Share this | Link to this | Hansard source

This is another way of asking the same question, and I can only give the same answer. The government understands the difficulties faced by the 35 per cent of Australian households who have owner-occupier mortgages and who will be paying—depending on their own circumstances and whether they have a fixed loan or a part fixed loan and on whether they extend the term of their loan—another one-quarter of a per cent on their home mortgage.

What Australian families in these situations want us to do as a government is to use the levers at our disposal to ensure that inflation remains as low as possible—and inflation is half the rate under our government that it was under the previous government—to ensure that real wages continue to rise, as they have under our government, and to continue to ensure that they have 30-year lows in unemployment so that they can maintain their role in the workforce and retain security of employment. These are the things that are critical to Australian families.

While I acknowledge that those families with mortgages will pay more as a result of this rate rise, they will have the comfort of knowing that mortgage rates, even at 8.05 per cent, are considerably lower than they were when we came into office, when they were at 10.5 per cent. On the average mortgage, people are paying much less than they would be paying if mortgage rates had stayed at 10.5 per cent.

Steve Hutchins (NSW, Australian Labor Party) Share this | Link to this | Hansard source

Mr President, I ask a supplementary question. Is the minister aware that house prices in some suburbs of south-western and Western Sydney have fallen by up to 40 per cent over the last three years as interest rates have climbed eight times? Hasn’t a Sydney property expert stated that this rate rise ‘could be the final straw for the property market’? Will the minister now apologise on behalf of the Prime Minister for misleading the families of south-western and Western Sydney in claiming that he would keep interest rates at record lows?

Nick Minchin (SA, Liberal Party, Minister for Finance and Administration) Share this | Link to this | Hansard source

It is a fact that Sydney house prices have experienced some volatility. Having been raised in Sydney, I know that that has been the case in the entire post-war period. Sydney house prices experienced huge rises over the recent period and there has been some easing in the house prices in Sydney. The beneficial effect of that is that it makes it easier for new home purchasers to buy a home. When house prices go up, Senator Carr whinges about affordability; when they go down, Senator Hutchins complains about house prices falling. This is typical of the Labor Party. If they go up, they complain; if they go down, they complain. The fact is that, in Sydney, house prices will sometimes go up and will sometimes go down. The virtue of some easing in Sydney house prices is that more young Australian couples will be able to afford a house.