The TD Securities Melbourne Institute monthly inflation gauge which closely tracks the official measure climbed 4.0 per cent in the year to February in headline terms and 4.1 per cent in underlying terms.
The result is sharply higher than the 3.0 and 3.6 per cent most recently reported by the Bureau of Statistics and well above the Reserve Bank's target of 2 to 3 per cent...
On releasing the data the senior strategist at TD Securities Joshua
Williamson said that the Reserve Bank would increase the general level
of interest rates by at least 0.25 per cent today and, unless
inflation pressures eased in the very near future, "further increases
beyond that" were likely.
Mr Rudd yesterday announced a National Rental Affordability Scheme
under under which the Commonwealth would provide private investors
with tax credits of $6,000 per year for ten years for building new
properties that were rented out at 20 per cent below the market rate.
The aim would be to cut rent on a new average three bedroom unit from
the current $350 per week to $280 a week.
The scheme should encourage the construction of 3,500 affordable
rental houses in the coming financial year and eventually up to
100,000; double the number promised during the election campaign.
The Prime Minister also announced a $500 million housing affordability
fund to tackle rising infrastructure charges and local government
planning delays.
It would invest $30 million to upgrade information systems within
local authorities to speed up planning approvals
Mr Rudd also released a study conducted by the National Centre for
Social and Economic Research which found that 1.1 million low and
middle-income households were now in housing stress, spending more
than 30 per cent of their gross income on either rent or mortgages.
The number represents an increase of 220,000 since 2004.
The modeling showed that while in 1996 the mortgage repayments on an
average loan soaked up 17.9 per cent of average household income, by
the end of 2007 they were soaking up 32.3 per cent – roughly twice as
much - suggesting that the typical borrower was in mortgage stress.
The Prime Minister held out no hope of things improving quickly saying
that rents had almost doubled since 1996 and that on current estimates
they would climb another 28.5 per cent before the end of the decade.
Speaking on Brisbane radio he urged mortgage lenders to do no more
than pass on the interest rate hike of 0.25 per cent expected from the
Reserve Bank today saying that if they went further the government
would "not be restrained from making appropriate comment".
"Banks experiencing record profitability should be very, very mindful
of their corporate and community standing before leaning on people who
borrow from those banks any further," he said.
"I think everyone out there who obtains a home mortgage has to go into
it with their eyes wide open and look at the fine print of what banks
are offering."
Serval banks are keen to increase their mortgage rates by more than
the 0.25 per cent increase to be initiated by the Reserve Bank today.
An increase of 0.4 per cent, expected from some lenders, would add a
further $100 to the monthly cost of servicing a $400,000 loan.
