The Australian housing crisis has become the centre of a political clash after Opposition Senate leader Michaelia Cash accused the Albanese Government of damaging the market through proposed changes to capital gains tax and negative gearing.
Ms Cash made the claim during a heated television interview with Housing Minister Clare O’Neil, citing a reported 20 per cent fall in new home sales, struggling builders, rising rents and investors leaving the market.
She said the figures showed the Government’s housing policies were discouraging investment and putting further pressure on construction.
“How much more pain do Australians need to feel before you actually admit that your housing taxes are actually crashing the housing market?” Ms Cash asked.
The Housing Industry Association has warned that builders would struggle to withstand further interest rate rises alongside the Government’s property tax changes, pointing to weaker confidence and increasingly difficult financing conditions.
Housing Minister rejects claims of a market crash
Ms O’Neil rejected the claim that the housing market was crashing or that the Government’s changes were responsible for the fall in new home sales.
She pointed instead to housing approvals, which she said had risen by more than 8 per cent and increased for a third consecutive year. Approvals had also risen by 26 per cent since the National Housing Accord began, she said.
Ms O’Neil also said official indicators showed a record number of investor home loans were going towards new builds, alongside the highest level of investment in new construction since records began.
“The problem before was that you were basically having investors being subsidised by the young people of this country to outbid them at auctions for existing housing, and we want that money going into new builds because that’s important for the country,” she said.
Sunrise presenter Nat Barr challenged the minister over the contrast between the Government’s figures and the industry’s warning of a sharp fall in new home sales.
Ms O’Neil said she respected the industry’s data but argued it did not provide the complete picture. She said interest rates remained the biggest influence on the number of homes built each year and noted that Australia had experienced three rate rises.
Asked whether the Government’s policy was failing or needed more time, Ms O’Neil said there had been warning signs in the housing market before the federal budget.
She said investors could still access housing tax concessions if they directed their money towards building new homes.
Coalition promises to reverse tax changes
Ms Cash maintained that Labor’s approach was worsening the housing shortage, pointing to falling construction, higher rents, investors withdrawing from the market and high migration.
She claimed annual home construction had fallen from about 200,000 under the Coalition to around 170,000 under Labor, while 1.5 million people had entered the country over four years.
“Clare, you’re the housing minister. Australians are sleeping in cars,” Ms Cash said, linking the situation to what she described as failed Labor policies.
She said the Coalition would scrap the changes to capital gains tax and negative gearing if it returned to government.
“Because you do not solve the housing shortage in Australia by taxing the housing market and making investment less attractive,” Ms Cash said.
Ms O’Neil argued that the housing pressures reflected a shortage that had built up over decades, saying young and low-income Australians were bearing the consequences of a system that had failed to deliver enough homes.
She said a low-income young person in Australia was half as likely to own their own home, while Ms Barr pressed her to focus on what the Government was doing to address the immediate concerns raised by builders.
