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TAMWORTH AND DISTRICT CO-OPERATIVE HOUSING SOCIETY FUNDING Mr PETER DRAPER (Tamworth) [6.11 p.m.]: Today I detail the frustrating situation unfolding in my electorate regarding the access of home buyers to affordable home loans backed by a New South Wales Government guarantee. Regrettably, the Tamworth and District Co-operative Housing Society is experiencing a crisis due to a shortage in the funding that is available to it through the Government Guaranteed Loan Scheme. While the society is patiently waiting for additional funding to be released by the New South Wales Department of Housing, potential local homebuyers are losing the opportunity to secure their preferred properties, which is resulting in high levels of stress and anxiety. When the society was in need of extra funding earlier this year I asked the Minister for Housing, the Hon. Carl Scully, to intervene. The department responded with a $2 million injection in funding, taking the society's overall lending power to $6.8 million, which was terrific news. I acknowledge the department's role in making that possible and I thank the Minister for his assistance. However, the delight I had in passing on that good news was dampened when it became apparent that demand still far outweighed supply. Following the announcement of the $2 million boost, staff members were inundated with calls from 120 hopeful homebuyers inquiring about the scheme. That resulted in 47 potential borrowers qualifying for $1.3 million in loans under the scheme. However, the society is obviously unable to issue letters of offer to those clients without additional funding approval. The fact remains that the society used the additional funding within 10 days of it being made available. Now a growing list of borrowers who meet the scheme's guidelines are waiting to purchase their chosen properties. The fact that people are profiting from this unfortunate scenario is making matters worse. Brokers acting on behalf of Sydney societies, which have available funds, are charging significant fees for their services. A broker in Tamworth recently quoted a couple $3,800 to broker its loan on behalf of a Sydney housing society. That is against the spirit of the scheme and it is an unnecessary impost on those who can least afford it. I have, therefore, again asked the Minister to release more funding to the Tamworth society as soon as practicable. The service offered by the Tamworth and District Co-operative Housing Society is vital. The society plays a unique role in helping people realise their dream of home ownership. The property boom, although slowing in some sectors, continues to render the great Australian dream a distant and seemingly unreachable goal for many low-income earners, even in rural areas where prices are not as inflated. In smaller towns in my electorate such as Kootingal, Werris Creek and Bendemeer, real estate prices are more affordable but require a larger deposit of 10 per cent to 20 per cent. That, coupled with the costs of lenders' mortgage insurance, continues to place low-income earners out of the market. Tamworth is extremely fortunate to have a society operating and prospering in its midst. The Tamworth and District Co-operative Housing Society was established in the early 1950s to provide affordable finance to homebuyers in country New South Wales. It comprised a number of societies that borrowed money through normal commercial lenders. Those funds were distributed by way of individual loans to society members. As members repaid their loans the society in turn repaid the commercial lenders loan. That arrangement continued until 1994 when the then Government withdrew its guarantee for new lending. In 2002-03 the Government reintroduced the scheme, enabling the Co-operative Housing Society Association to borrow under the Government Guaranteed Loan Scheme. Some $75 million was allocated between 10 societies in New South Wales under the direction of the Department of Housing. At the height of lending in the last decade there was a housing co-operative in most large towns in New South Wales. Today the only country societies are based in Tamworth and Bathurst, with eight in Sydney and Newcastle. The bulk of the funds are currently held by larger societies that are based in Sydney and Newcastle, while Tamworth and the Macquarie society in Bathurst have a high demand but insufficient funds. If the Tamworth society were able to obtain an additional $2 million to $3 million, it would satisfy current potential borrowers and maintain the lending service until the new allocation in early 2005 between the Department of Housing and the proposed supplier of loan funds. It is hoped it will be granted sufficient funding in 2005 to eliminate the need to keep requesting additional funds.In the short term, potential borrowers are losing the opportunity to purchase a home under the scheme and the reputation of the society, the lending scheme and the Government is being tarnished. The society provides a vital service to people in the Tamworth district and, importantly, it enables home ownership to continue in smaller country towns. I again urgently call on the Minister for Housing to act on the society's request for additional funding. Without the Minister's intervention qualified borrowers face a bleak Christmas, with their dreams of home ownership dashed while they wait for the co-operative to secure additional funding approval. |