The Productivity Commission draft report is an important contribution to the discussion on first home ownership and highlights many important features of the current housing cycle.
Home ownership in Australia remains at one of the highest levels in the world. The overall trend in the number of first home buyers has been broadly consistent over the past decade. Availability and access to credit for first home buyers has never been better, while mortgage interest rates remain at historically low levels. Most importantly, more than 1.3 million jobs have been created since 1996, allowing first home owners more opportunities to purchase their first home and allowing an increase in the standard of housing.
While the First Home Owners grant was designed specifically as compensation for the introduction of the GST in July 2000, it has helped thousands of Australians enter the housing market.
The Commission's draft report emphasises that house prices and housing affordability are highly cyclical, noting that prices fall as well as rise and affordability improves as well as declines. Given the cyclical nature of the sector and the overall complexity of the housing market, the draft report serves as a reminder that government policy should be addressed against a medium term framework.
The Government will carefully examine any recommendations in the Productivity Commission's final report, due out in March. I would urge State and local Governments to also examine the report, particularly the recommendations regarding stamp duty.
I would like to thank all of those who have made public submissions to the Inquiry on First Home Ownership. Interested parties now have the opportunity to comment on the preliminary analysis and findings in this Discussion Draft through further written submissions and by participation in the public hearings. The Productivity Commission will be holding public hearings from late January 2004, with dates and venues of the public hearings to be advertised through circulars, in major newspapers and on the Productivity Commission website at www.pc.gov.au.
The Government looks forward to the outcomes of these public hearings and their contribution to the development of the final report. The Government will respond in full to the Productivity Commission's findings following receipt of the final report on 31 March 2004.