Here’s what’s happening behind the headlines
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Australia’s booming house prices are the result of the government’s failed policies, with the younger generation now unable to afford what their parents could, a minister has revealed.
Figures from SQM Research revealed that capital city average house prices have increased 3.5 per cent over the week ending 6 April 2021, bringing the median asking price to $1,006,500.
In contrast, average unit prices across capital city markets decreased by 1.5 per cent to a median of $564,300 over the same week.
During an economics standing committee involving the big four banks, Liberal heavyweight Jason Falinski questioned Commonwealth Bank CEO Matt Comyn whether the growth in the housing market is sustainable, with so many Australians now unable to afford a property.
“We, as I’m sure you do, worry about inequity and housing affordability both currently and into the future,” Mr Comyn said.
“Ultimately, it’s about getting the balance between supply and demand, recognising that there are very much different markets and subsectors,” Mr Comyn explained when asked about how to solve housing affordability.
He added that “investment in infrastructure, changes to facilitate faster planning and construction of new dwelling, adding more supply and particularly affordable housing into the market next to efficient and productive transport corridors” could be solutions to housing affordability issues.
Mr Falinski pressed further, pointing to an up to 36 per cent decrease in housing approvals in some states despite an increase in people wanting to enter the housing market and a decrease in the cost of borrowing, putting the blame on governments and developers.
“If we talk about the last 12 months, it has obviously been an uncertain time. There were concerns over the economic recovery and trajectory over much of last year. The housing market really bottomed in September or October with a number of developers concerned with the outlook,” Mr Comyn said.
“They were concerned about the ongoing demand, and that’s why there is a number of different projects from HomeBuilder to the first home buyers scheme, and changes in states around stamp duty, a lot of those packages have brought forward purchases and stimulated demand, which is giving developers greater confidence to add to supply,” the CEO continued.
Mr Falinski opined that the prices of “houses are artificially held high because of regulatory failure”.
He further questioned how a country like Australia, which is the least populated continent in the world beside the South Pole, can have prices that are “more akin to the most densely populated city states”, noting it can’t be due to a surge in first home buyers or the cost of financing.
“It’s a topic of frustration for this parliamentarian for younger people to be able to afford the things that you and I could afford when we were starting off in the workplace. It just seems like a complete and utter failure,” Mr Falinski concluded.