Memorandum-to-the-Prime-Minister-on-Unaffordable-Housing

1992 (although <strong>the</strong> fall was anything but gentle for <strong>the</strong> many thousands of home owners repossessed during this
period). All through <strong>the</strong> 1990s <strong>to</strong>tal housing debt continued <strong>to</strong> rise much faster than earnings and <strong>the</strong>
Consumer Price Index and at an accelerating rate.This began <strong>to</strong> pull house prices first above <strong>the</strong> CPI index
from about 1996, <strong>the</strong>n above <strong>the</strong> earnings index in about 2000 and <strong>the</strong>n in<strong>to</strong> a steeply rising curve from that
date <strong>to</strong> <strong>the</strong> latest available figures.
By 2005 housing unaffordability has become all <strong>to</strong>o clear from <strong>the</strong> wide gap that has opened up between <strong>the</strong>
house price and earnings indices. Since over <strong>the</strong> period <strong>the</strong> debt outstanding rose by over 1600% while <strong>the</strong>
s<strong>to</strong>ck of houses <strong>to</strong> be purchased increased by only 21% it would be remarkable had <strong>the</strong>re been any o<strong>the</strong>r
outcome than rapid house price inflation and sharply declining affordability.
Zacchaeus 2000 Trust - <strong>Memorandum</strong> <strong>to</strong> <strong>the</strong> <strong>Prime</strong> <strong>Minister</strong> - May 2005 39