Andrew Bragg, the Coalition’s housing spokesman, has been saying that this is what should happen – that “entry-level” house prices should fall by two-thirds. He pleaded the case that this is the most ignored issue by his own guys – they are afraid to talk about it. As the Coalition continues to develop its housing policy, Bragg advocates for a reduction in the value of entry-level homes, ideally at or below the current rate of inflation, 8.2% as of October.
Meanwhile, national house prices climbed 1.1 percent in October—their fastest monthly rate of growth in more than two years. Single-family home prices jumped by 6.1 percent year-on-year. In large part this growth was driven by the lower and middle market segments. That means the average monthly growth rate for this year is just 0.6 percent. As a result, this rapid appreciation of property values serves as a double whammy for would-be homeowners, especially first-time homebuyers hoping to break into the market.
Acknowledging the Problem
Bragg explained that most of his contemporaries are unwilling to take on the growing cost barrier of starter homes. He said, “There shouldn’t even be a question on this,” reinforcing the importance of acting on this concern. The Coalition isn’t just quibbling over housing policy. They all believe, like Cohn, that these market conditions are inarguably unsustainable for first-time buyers.
“Labor have created this uncapped, non-means-tested 5 percent deposit scheme and that is really hurting entry-level first home owners and so the prices have gone up.” – Andrew Bragg
Bragg’s comments speak to a rising frustration within Coalition Government ranks about how government policy is driving up housing prices, often unintentionally. His hope is that we can all join forces to start turning the tide. First-time buyers may find it increasingly difficult to even afford a home.
Government’s Stance on Housing Prices
Clare O’Neil, the current Minister for Home Affairs, has recently declared war on rising house prices. She has repeatedly made clear that the government does not agree with falling house prices. In a recent article, she mentioned, “We don’t want to see some of the growth that we’ve seen in some parts of the country.” O’Neil’s response reveals an understanding that the goal should be to stabilize the market, not to let prices drop.
“I think it’s not accurate to blame this on a policy that started about four weeks ago.” – Clare O’Neil
O’Neil makes an effective case against the recent government initiatives to assist first-time buyers. Meanwhile, he doubles down on his commitment to support the long-term growth of the market. Overall, the government does seem committed to creating a long-term environment that allows for homeownership to continue to be accessible for new entrants, while not undoing market progress.
Expert Insights on Market Dynamics
Eliza Owen, a prominent market analyst, described October as a “pretty surprising and exceptional month for price growth.” As Owen noted, the public is deeply concerned about inflation. He noted that there is “little” worry over the return of negative equity for homeowners, as home values continue to rise.
Owen criticized current strategies, stating, “They’ve tried to give first home buyers a leg-up into a rising market rather than bringing the market down to get more people in.” She agrees that we need to address the root problems in the housing market. Taking those steps now is critical to realizing a future that’s safer, more efficient, and more equitable.
The recent surge in house prices has raised alarms among stakeholders who fear that without intervention, homeownership may become increasingly unattainable for many Australians.
Future Directions and Policy Considerations
Bragg has been clear that as discussions around housing policy continue to change, she’s open to exploring new ideas. He’d like to see politicians restricted to a single domicile only. He thinks these measures are important steps towards addressing inequities in the housing market. They will help increase access to entry-level homes for new buyers.
Bragg’s call for action underscored the need for more effective policies focused on lowering entry-level home prices. Absent these huge changes, millions of would-be homebuyers will be shut out of the market completely.
