Pricey Housing Costs Aussies 30 Percent of Pre-Tax Income

Brisbane–High mortgage and rent costs, gas prices and food expenses have driven inflation up to its highest level in six years in Australia –and will force economic growth down for the next decade, according to a recent survey.Prime Minister Kevin Rudd said Monday in a speech to business leaders in Brisbane that the country was facing a difficult period, The New Zealand Herald reports. Australia has the second-highest interest rates in the developed world; productivity growth is at its lowest point in 15 years. Inflation and housing are putting a serious strain on the economy. A new government-commissioned study released Monday found inflation is severely damaging thousands of families ability to buy or rent a home, made worse by a serious housing shortage. Housing stress in Australia has risen by 25 percent, encompassing 220,000 households, since 2004.Rental vacancy rates have dropped below 3 percent in every capital city. Rents for three-bedroom houses have increased 82 percent since 1996, according to the Real Estate Institute of Australia study. A study by the National Centre for Economic and Social Modelling indicated 1.1 million low- to middle-income families now spend more than 30 percent of their pre-tax income on rent, mortgage payments and other housing expenses.The government hopes to reduce rent to A$280 a week from A$350, according to Rudd.