First home buyers who purchased recently but have seen house prices fall following the government’s most recent budget should not worry, Treasurer Jim Chalmers has said, arguing that house prices are forecast to increase in the long term.
“Housing is a long-term investment, and you don’t make decisions about housing based on short-term fluctuations in prices or even in auction clearance rates, and the assumption in the Treasury documents provided with the budget is that house prices will continue to grow, but a bit more slowly,” Chalmers told journalists at Parliament House in Canberra.
“What this is all about is making sure that there are more affordable options available, particularly for first home buyers,” Chalmers said.
Treasury forecasting of budget measures showed a slowing of price growth of about 2 per cent per year, however independent modelling by firms Westpac and Morgan Stanley showed a 3 to 10 per cent drop in house prices in the capital cities.
Property values in the capital cities last month were static, but in Sydney overall values fell by 0.9 per cent to be down by 2.1 per cent over the past three months.
In Melbourne, total dwelling values slipped another 0.8 per cent to be down by 2.3 per cent during the quarter.
“For too long, we’ve had this broken status quo in this country, where the intersection of the tax system and the housing market has locked too many Australians, and particularly young Australians, out of housing, and so we are changing that, and it’s not the only thing that we’re doing,” Chalmers said.
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