Australia's dysfunctional housing quagmire

12 April 2024

Towards the close of the ABC’s recent Q+A episode devoted to homeownership, homelessness and housing supply, audience member Anneke Nehring asked a straightforward but telling question: ‘Do you think housing prices should go down?’

Since escalating real estate values are pushing Australia into an ever-deepening housing crisis, an affirmative answer would seem the obvious response. Yet none of the four politicians on the panel would reply with a simple ‘yes’.

Liberal Senator Andrew Bragg, the Shadow Assistant Minister for Home Ownership, argued that if we built more homes and cut immigration, lower house prices would be the ‘natural consequence’. Simultaneously, though, he declared himself ‘relaxed’ about how the market decides to price things.

Assistant Treasurer Andrew Leigh responded that ‘the best we’re going to be able to do is moderate the growth in house prices’. If all goes well, in other words, house prices will keep rising, just not so quickly. (Leigh argues that the key to housing affordability is higher incomes.)

The Greens’ Max Chandler-Mather put a similar view. We should stop the growth of house prices, he said. He didn’t say that prices should fall.

It was the Minister for Housing in the NSW Labor government, Rose Jackson, who came closest to answering yes. ‘$1.6 million for a median house price in Sydney is unacceptable,’ she declared, implying that prices should be lower. (According to the latest data, the median Sydney house price is actually ‘only’ $1.14 million, but since it jumped about $110,000 in the past year, on current trends her putative median price of $1.6 million is just a few years away.)

The lively state minister largely put her federal colleagues on Q+A panel in the shade. Jackson was more passionate and far less prone to pursuing a party line. Since we’ve got ourselves into such a ‘dysfunctional quagmire’, she said, every policy option must be up for negotiation, including the property tax reforms that federal Labor desperately wants to keep off the table.

Yet even for Jackson, definitively stating that house prices should fall was a step too far. In line with her political colleagues, she also hoped ‘to moderate the growth in house prices’. Again, not to bring prices down, just stop them rising so fast.

'Labor, Coalition and Green MPs all say they want more people to be able to buy their own homes. The most obvious way to achieve that would be to reduce the price of housing. Yet no

AUSTRALIA

Australia's dysfunctional housing quagmire

Subscriber login