John Alexander (Bennelong, Liberal Party) Share this | Hansard source

I thank the member for Macnamara for starting this important debate. Housing is a significant part of Australia's identity. While the American dream aspires to high office, wealth and independence, the humbler Australian dream is just a block of land that you can call home, your castle. It is not a coincidence that the Menzies years, which were remembered as the halcyon days after the war, when Australia finally stood on its own two feet, are also years that prioritised home ownership and saw home ownerships rise to their highest levels ever—our foundation of common wealth.

Those years are far behind us now, and every year the number of homeowners shrinks compared to investors. Headlines across the media are discussing the huge rises we have seen in recent weeks, and real estate websites and their affiliate newspapers are rejoicing as the records tumble every week. But behind every headline celebrating a suburb's record being beaten there are dozens of aspiring first home buyers, once again, going home empty handed, redoing their sums to see how much more they must save to have a chance at homeownership.

It was only a year ago that many were predicting house prices could fall by up to 30 per cent. The dream of first home buyers was within grasp again, but now it is further away than ever. Initially, the boom was led by homeowners, specifically first home buyers. That was fine, but sadly those days are behind us. Data released last week shows that in the past month alone investors were up 12.7 per cent and first home buyers fell by 0.9 per cent. Interest rates are at record lows and the cheap money is fuelling these price rises. Back in 2019 interest rates were at a record low too, and we saw exactly the same outrageous growth at that time. As long as interest rates are below rental returns, investors continue to flood into the market, and while support grants are exceptionally healthy they address symptoms not the cause.

Gallingly, strong house prices are being cited as an economic stimulant, responsible in part for the economic confidence we are feeling right now. Housing is the wealth effect that encourages Australians to spend and keep the economy moving, which is why regulators are reticent to act. Soon we will see that the price has been worse than the result and we'll wish we had acted sooner. We'll wish that we had acted now. It is not hard, as we know what to do. We've done it before. It was in 2019, during the greatest-ever growth in housing prices. APRA stepped in and brought curbs to investors, like enforcing a 20 per cent deposit for investors. This, in part, did the trick and soon prices were having the sort of measured decline that was so needed. Unfortunately, in a market that rarely falls, this downturn scared many, and by the time COVID had reared its ugly head the reforms were scrapped. Why can't APRA bring this back? Why does this have to be a binary on-or-off option? Why not allow loan-to-value ratios to fluctuate, set on a monthly level like the interest rates are? Investors could be incentivised or disincentivised to join or leave the market, and this adjustable lever could offset the incentives inadvertently created by interest rate reductions. Housing should not be an asset to make a quick buck. It needs to have solid foundations and to prioritise those who need shelter over those who wish to get rich. Curbing investors, to the benefit of home owners, may impact some, but, inherently, the only people it hurts are already fortunate, and it's to the benefit of those who really do need help.

It is clear from the statements in the budget last night that housing is a priority of this government, which is great news. The support for first home buyers is necessary and will help those who receive it. But I have concerns that, for as long as interest rates remain this low, more structural change will be needed before we can really have confidence that our housing market is delivering for the people that need it most.

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