Labor is in damage control over falling house prices. Why not take credit instead? | Tom McIlroy
News Source
โขFri, 04 Sep 2026 15:00:10 GMT
๐ฐ What Happened
Labor is struggling to explain a growing downturn in Australia's property market. Data from analytics firm Cotality showed prices fell in 95% of Australian suburbs in August. Voters are angry about falling house prices, and the government is feeling the pressure. Assistant minister Matt Thistlethwaite was blunt on ABC TV. He said budget changes to negative gearing and capital gains tax were 'part of a suite of reasons' for the drop.
The Commonwealth Bank expects national dwelling prices to drop by as much as 9% in a larger, faster adjustment lasting until April next year. After that, prices should recover, rising 2% over 2027. Housing minister Clare O'Neil and treasurer Jim Chalmers say the drop is due to factors broader than just the government's changes.
๐ The Backstory
House prices have been a political minefield for decades. High prices helped homeowners feel rich but locked young people out of buying. Labor's budget changes to negative gearing and capital gains tax were meant to cool investor demand and improve fairness. Now that prices are falling, many homeowners are unhappy.
Political analyst Tom McIlroy argues Labor could take credit instead. In the long run, cheaper homes and better intergenerational equity could help the party. The housing market is now central to the election debate, with analysts predicting prices could fall 10% as a fourth interest rate hike looms.
๐ฏ Why It Matters
House prices decide whether families can buy a home and how much wealth they hold. Falls help first home buyers but worry existing owners. How the government handles this balance affects the housing market and the next election.
Labor is struggling to explain a growing downturn in Australia's property market. Data from analytics firm Cotality showed prices fell in 95% of Australian suburbs in August. Voters are angry about falling house prices, and the government is feeling the pressure. Assistant minister Matt Thistlethwaite was blunt on ABC TV. He said budget changes to negative gearing and capital gains tax were 'part of a suite of reasons' for the drop.
The Commonwealth Bank expects national dwelling prices to drop by as much as 9% in a larger, faster adjustment lasting until April next year. After that, prices should recover, rising 2% over 2027. Housing minister Clare O'Neil and treasurer Jim Chalmers say the drop is due to factors broader than just the government's changes.
House prices have been a political minefield for decades. High prices helped homeowners feel rich but locked young people out of buying. Labor's budget changes to negative gearing and capital gains tax were meant to cool investor demand and improve fairness. Now that prices are falling, many homeowners are unhappy.
Political analyst Tom McIlroy argues Labor could take credit instead. In the long run, cheaper homes and better intergenerational equity could help the party. The housing market is now central to the election debate, with analysts predicting prices could fall 10% as a fourth interest rate hike looms.
House prices decide whether families can buy a home and how much wealth they hold. Falls help first home buyers but worry existing owners. How the government handles this balance affects the housing market and the next election.