Monday, September 11, 2006

PM told he's wrong on house prices

PM told he's wrong on house prices

Housing booms and unaffordability are multi-factorial. The Federal Coalition is as much to blame as anybody for keeping negative gearing on investment properties and halving the rate of capital gains tax – these are just two of the inputs to housing price increases. Other factors include liberalised credit products from lenders, low interest rates, a shaky share market, and the 'psychology of booms' or irrational exuberance. However, no government in Australia has done anything particularly meaningful yet to alleviate the housing boom or make life easier for first home buyers, but appear to be cheerleaders who want to join the club in uncritically celebrating every price rise as an 'increase in household wealth'.

Mr Robertson said the needs of first-home buyers were being ignored because most voters were home owners and therefore had an interest in higher, not lower, property prices.

'Neither the Coalition nor the Labor Party in Canberra show any sign of going out of their way to make any significant difference – [First-home buyers] are not a big enough priority for Canberra to do much beyond blaming the states for not releasing enough land,' he said."

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