Labor has shown what a government can do to improve housing affordability, exposing how pathetic previous attempts had been
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For the first time in 25 years, an Australian government actually did something about housing based on the idea that the only way to make houses more affordable is for house prices to fall. They stopped pretending there was another way.
For years, politicians liked to talk about how, if incomes rise faster than house prices, housing becomes more “affordable”.
But let’s cut through all the shrubbery.
When the median house price in Sydney at the end of last year was $1.56m – that’s $605,000 (63%) higher than it was in the middle of 2020 – getting income to rise a bit faster than prices was not going to do much at all.
The way the market was set up was just helping those with property and those making stonks of money lending out ever larger mortgages. There’s a reason why Commonwealth Bank yesterday reported a bumper $10.9bn profit for 2025-26 (up 7%) and yet was warning things might not be so good for 2026-27.
And that’s because, after three interest rate rises and a government finally willing to undo the damage of the 50% capital gains tax (CGT) discount and negative gearing, prices have actually begun to fall.
It speaks to just how pathetic every attempt since 2000 to address the decline in housing affordability has been that only now, after tackling the CGT discount and negative gearing, are there headlines about price falls.
The big one this week is ANZ research suggesting that by the end of next year prices in capital cities across the country will have fallen 10.6%, with falls of 14.5% in Sydney.
Or so the leader of the opposition, Angus Taylor, would have you believe.
On Tuesday he opened the first question time of this sitting period by asking the prime minster: “The ANZ bank today reports Sydney house prices could fall by almost 15%, the worst crash in more than four decades. Will the prime minister finally admit Labor’s broken promises on capital gains tax and negative gearing have made millions of Australian homeowners worse off?”
My goodness, the worst “crash” in four decades!
Not to be outdone, one property agent suggested we are in a “property recession”.
I guess it’s time to start getting the kids to gather at the feet of gen Xers to hear them talk about the dark days of the early 1990s.
