Australia wakes up to a new prime minister and governance with the Rudd Labor government taking charge after strong campaigning on housing affordability, interest rates and a commitment to continue a strong economy that delivers to ‘working families’.

It’s all pretty easy to say and write on paper but actually delivering on those commitments and on their arguments against the previous governments record which has won the hearts and minds of Australian voters will be a challenging role. Keeping inflation low and removing the need for the RBA to pull the hand brake on via the interest rate lever in a strong economy will be a big challenge for fiscal policy.

Building capacity takes time, keeping wage pressures under control and managing the implementation of the big ticket tax cuts while maintaining low unemployment will all take some skill in the fight to keep inflation at low levels. That’s if the economy stays strong, which by all reports should although we probably haven’t heard the last or felt the last of the effects from a fragile US economy…

The recap of this weeks mortgage, home loan and housing news in Australia.

The top stories for the week ending 25/11/07:

RBA buys $400m in mortgage bonds
The Age
The RBA said it would buy AAA-rated mortgage-backed bonds after losses tied to US subprime securities caused investors to flee the market and the rate banks charge each other unexpectedly rose to an 11-year high and has bought $400 million of bonds backed by residential mortgage-backed securities.

Living with a reverse mortgage – ASIC report
Australian Securities and Investment Commission (ASIC)
An interesting report from ASIC on reverse mortgages called ‘All we have is this house’ was established from detailed interviews with 29 consumers of reverse mortgage products. The report reveals that while the borrowers interviewed were generally satisfied with the reverse mortgages they had taken out, several factors inhibited ‘good consumer decision-making’. A PDF copy of the report is available via the link above. Janine Mace of MoneyManagement.com.au has an article about reverse mortgages - Shifting gears on home equity covering thoughts of retirement planners and changing trends.

Mortgage rate rise tipped
Herald Sun
The Commonwealth Bank has confirmed that mortgage rates will rise whether or not the Reserve Bank moves again on official interest rates due to funding pressures from the US driven credit crunch.

More interest rate pain on the way
News.com.au
New figures on economic growth from Westpac suggest mortgage holders should brace themselves for further interest rate pain in 2008.