The house price question tying politicians in knots

Senior Government and Opposition MPs say they want house prices to continue rising at a slower rate after auction approval rates fell to their lowest level since April 2020.

Nearly 1,900 homes were hit in Australia’s capital cities on Saturday, but only 47.4 per cent of them were sold, according to property research company Cotality.

Cotality research director Tim Lawless said on Sunday that the number of auctions would decline further in the coming weeks due to the seasonal downturn and weak sales conditions.

Investor groups have warned that the federal government’s decision to roll back negative gearing and the capital gains tax concession will make housing a less attractive investment.

But senior minister Tanya Plibersek said on Monday the government still wanted house prices to rise.

“Over time, we don’t expect house prices to continue to fall, but to rise more slowly,” he told Seven’s Sunrise programme.

“House prices are rising too fast, meaning young Australians can’t afford a home of their own.”

Environment Secretary Murray Watt said Treasury modeling showed the government’s changes to negative gearing and capital gains tax would have a short-term impact on house prices, but growth would continue over the long term.

“We’re also investing huge amounts of money to increase the supply of new homes, but we needed to do something on the demand side as well,” he told ABC News Breakfast.

Pressed repeatedly on whether he wants house prices to fall, National Leader Matt Canavan said he wants more cheap homes to be built.

“What we need to do is make some homes more affordable… that doesn’t mean prices are going down for people who own existing homes,” he said.

“The problem is not them falling… It’s the most important asset on Australians’ balance sheets. But we can make housing more affordable to create more supply,” Senator Canavan said.