Grim prospects for home-seekers

Press, Volume CXIV, Issue 33694, 18 November 1974, Page 21

Grim prospects for home-seekers

(From

PAUL CAVANAGH.

N.Z.P.A staff correspondent)

SYDNEY. Steps taken by the Australian Government recently are not expected to ease the grim shortterm prospects facing young Australian homeseekers or the state of near-recession in the jbuilding and sawmilling industries.

That was the view of in-1 ■ dustry leaders after the ani nouncement by the Prime iMinister (Mr Whitlam) that: 'savings banks would be provided with an additional slsom for housing loans. The release of funds was part of the mini-budget brought down by the Labour Government in an effort to counter the problems of unemployment and inflation land to return confidence to I the business community. But Mr J. Pilbeam, nat- ■ ional director of the Housing I Industry Association, said I that the extra slsom for home loans was not enough to revive the building industry. “We are certainly grateful ( for the extra slsom. but it represents no more than about 7500 houses spread bright across Australia,” he I said. “There is less than a • month's ‘starts,* so the

money is not going to go very far.” While the home-building industry fe suffering from the effects of the credit squeeze, the immediate future of the sawmilling industry is also bleak. House-building is at its lowest level for many years, 9H prospective home owners, faced with soaring interest rates, find it difficult to raise finance.

New housing starts in the Svdney metropolitan area in August were nearly 60 per cent down on those for last March and 50 per cent below the average August rate of the last two year*. For New South Wales as a whole, new house commencements have been static at about 30,000 a year since 1969-70. NEXT VEAR

Sawmillers and builders say that action taken by the Government to increase liquidity will not have any significant effect until well I into next year — the time i required for the extra bank I funds to be converted into 'actual housing starts. Critical to the whole question of recovery in the industries are the present high levels of interest on building loans, pushed up by the (fierce competition for money when the credit squeeze began to bite. “Until the Government .deals with the high interest

rates, there is still going to be a problem," said Mr R. Rocher, the New South Wales executive director of the Master Builders’ Association. “The cost of house construction « still going up and the real point at issue has to be the high interest rates.” SURVIVAL I The down-turn in homel building ’ means that for i many sawmills management I policies in the next six ’months will be directed at survival rather than profitability. The president of the SawI millers’ Council (Mr J Briggs) said that reports [from country areas disclosed jan alarming position for the industry. ' Sawm.lls were retrenching staff and thss would accelerate unless there was a rapid improvement in the market position, he said. Mr Biggs said that the virtual collapse of the homebuilding industry had caused sawmilleus to eliminate overtime, not fill vacancies, arrange for staff to take holidays in advance and to I use some staff for non-pro-iductive work around mills. More than 1200 workers have been retrenched in the i industry since July 1 and • present dismissals are running at the rate of about 10C i a week tn New South Wale, alone.