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Mortgage mayhem.

Article Excerpt
Housing speculation has created skyrocketing prices. The June 2007 quarter saw yet another increase in the average price of a first home, bringing the median price for houses in Sydney to $520,000 and in Melbourne to $420,000. Speculation is being funded by an unsustainable level of debt and fuelled by predatory loan practices by banks and other loan providers. As world financial markets shudder under the impact of the US-centred sub-prime loan disaster, some economists are worried that Australia is heading for a housing-led recession similar to that of the early 1990s. Unfortunately, the housing affordability debate has been dominated by the Property Council and the Housing Industry Association, which appear to have little interest in responsible housing policy.

According to the Housing Industry Association (HIA)/Commonwealth Bank Housing Affordability Index, in March housing affordability was down to its lowest level in twenty-three years, falling a further 2.7 per cent to June 2007. Mortgage repayments now account for 30.8 per cent of an average first-home buyer's income, relegating many Australian families to housing stress.

Housing stress is impacting on basic standards of living. Fifteen percent of Australians are experiencing housing stress (defined by the bottom 40 per cent of income earners paying more than 30 per cent of their income in housing), and of these, 52 per cent are renters. Some are resorting to behaviours we might expect in third world countries--going without meals, selling or pawning possessions, foregoing adequate health and dental care. According to Terry Burke at Swinburne...

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