Anthony Albanese has signalled a major shift in housing policy, indicating that he wants to end the era of soaring property values to help first home buyers. This marks a departure from the legacy of John Howard, who famously dismissed concerns about rising house prices.
John Howard's Legacy and the Australian Dream
John Howard once observed that voters rarely complain about the price of the family home going up. However, the Albanese Government is now taking a bold and potentially electorally risky stance by aiming to slow down property price growth.
Prime Minister Albanese let the cat out of the bag this week, stating that he does not want the value of your home to go up as fast as it has over the last 20 years. The numbers are stark: house prices have increased by 75 per cent in Adelaide, 120 per cent in Brisbane, 109 per cent in Perth, and 57 per cent in Sydney over the last five years.
Why Change is Needed
These figures help explain why younger Australians cannot buy a home. The Albanese Government is making significant changes to negative gearing and capital gains tax discounts for landlords, aiming to make it easier for first home buyers to enter the market.
In a passionate defence of the government's changes, Mr Albanese told parliament that the current trajectory has put the Australian dream of home ownership out of reach. Since 1999, house prices have risen by more than 400 per cent, more than two times as fast as average incomes in the same period.
He criticised the Howard government's 1999 changes to capital gains tax, which were meant to boost investment in the share market but instead turbocharged property investment, locking more young Australians out of the market.
The Bold Move
John Howard's interview years ago, where he brushed off concerns about rising house prices, highlighted the issue. At the time, house prices had doubled in the early 2000s due to the first home buyers grant, supercharging negative gearing and the capital gains tax discount.
Howard said, "I haven't found anybody in seven and a half years shake their fist at me and say, 'Howard, I'm angry with you for letting the value of my house increase.'" But twenty years on, Labor argues that it is a growing problem.
Potential Impact
One way to make it easier for first home buyers is to ensure that house price growth slows down. The Government insists that the impact of the tax changes will be modest, while rising interest rates will have a more forceful effect. This has led to headlines suggesting a housing market crash with predictions of a 9 per cent drop in prices.
However, context is everything. Homeowners in Adelaide, Brisbane, and Perth who have enjoyed wild property value gains of over 80 per cent in the last five years will remain well ahead even in a predicted downturn of 9 per cent.
Political Reactions
Interestingly, Liberal MP Andrew Bragg also took aim at the issue, arguing that house prices are too high for young people and should go down. He said, "I think Australians are looking for authentic leadership. They're over the bulls**t. The honest truth is that house prices in this country are too high for young people and they should go down."
While not all of Senator Bragg's colleagues agree with him, his comments highlight a growing recognition of the housing affordability crisis.
