Latest / The Morning Edition / More Australians, including Boomers, support a drop in house prices

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More Australians, including Boomers, support a drop in house prices · The Morning Edition

• 0:04
  S1: A growing majority of Australians want housing prices to fall,
• 0:08
  S1: in some cases by more than 20%, according to new
• 0:12
  S1: polling exclusive to our mastheads. Could it be that our
• 0:16
  S1: decades long obsession with growing house prices is finally coming
• 0:20
  S1: to a halt? I'm Samantha Zellinger Maurice, and you're listening
• 0:24
  S1: to Morning Edition from The Age and the Sydney Morning Herald. Today,
• 0:30
  S1: senior economics correspondent Shane Wright on why conventional wisdom about
• 0:34
  S1: what voters want from their housing seems to be wrong.
• 0:39
  S1: It's July the 14th. Shane, welcome back to the podcast.
• 0:46
  S1: Tell us, what does the latest resolve Political Monitor polling
• 0:50
  S1: tell us about how Australians are feeling about house prices?
• 0:54
  S2: Well, you know that there's been a huge debate about
• 0:57
  S2: house prices, particularly in light of the budget in May.
• 1:02
  S2: And so in June, we actually asked the question, do
• 1:06
  S2: people think they could live with lower house prices? And
• 1:09
  S2: in June, 54%, which was a big surprise to us.
• 1:14
  S2: Sky news did its own poll. They actually went, yep,
• 1:17
  S2: that's where it is around. We actually have just asked
• 1:20
  S2: it again. So in this new poll, 2200 people, 61%
• 1:26
  S2: say thumbs up to lower house prices and a drop
• 1:31
  S2: in the number of people who were opposed to lower
• 1:33
  S2: house prices like it is in single figures and like
• 1:39
  S2: even amongst coalition supporters. Now, the coalition has been saying, well,
• 1:44
  S2: this government just wants to drive down house prices. The
• 1:47
  S2: coalition may be at odds with its own supporters because 58%
• 1:51
  S2: of coalition voters, up from 41% in June. Yep. The
• 1:57
  S2: country needs lower house prices like in terms of polling,
• 2:01
  S2: and I have seen a lot of polls over over
• 2:04
  S2: the years to see these sorts of numbers. And it's
• 2:09
  S2: across every age group, every income group, no matter you
• 2:13
  S2: live out the back of Bourke or in the inner city.
• 2:17
  S2: Everyone says, yep, we've got stupid house prices. Let's see
• 2:21
  S2: them fall a bit.
• 2:22
  S1: Okay, so is it fair to say, were you shocked
• 2:24
  S1: by this, this, you know, quite sizeable support among Australians
• 2:28
  S1: for a drop in housing prices? I mean, dare I
• 2:30
  S1: say it's almost an Australian religion, uh, for people to
• 2:34
  S1: want their house prices to go up. Yes.
• 2:36
  S2: Yes. There's so many people praying at the the local
• 2:39
  S2: Ray white every Sunday, aren't they. Or Saturday.
• 2:41
  S1: I mean, just about.
• 2:42
  S2: Yeah. And I think you and I have talked previously
• 2:45
  S2: about it was John Howard more than 20 years ago.
• 2:48
  S2: He was on Brisbane radio and revealed no one's ever
• 2:50
  S2: stopped me saying I want the value of my house
• 2:52
  S2: to fall.
• 2:53
  S1: That's right. And at the time, just to just to
• 2:55
  S1: give listeners some context. So that was 2003 and that
• 2:58
  S1: was John Howard then being grilled because house prices had
• 3:02
  S1: at that point doubled in the previous seven years, so
• 3:04
  S1: the interviewer was grilling him. Sort of, I guess, justify
• 3:07
  S1: the continued rise in house prices. And that was back then.
• 3:11
  S2: And they've gone up 300% since then.
• 3:14
  S1: So I guess here's my question. Does this reflect a
• 3:16
  S1: larger cultural shift in our values? And I mean that sincerely.
• 3:20
  S1: You know, if at the time that was the prevailing wisdom,
• 3:22
  S1: if John Howard indeed was right, and if he was
• 3:25
  S1: telling the unvarnished truth that really no one had ever
• 3:28
  S1: complained about their house price going up, does this reflect
• 3:31
  S1: some broader shift in values?
• 3:33
  S2: I think it's reflecting a shift in the value of
• 3:36
  S2: housing over the last, okay, last 20 years. That is
• 3:40
  S2: part of it. There's also been a demographic change, like
• 3:43
  S2: when Howard was speaking in 2003, the boomer population was
• 3:48
  S2: still seven years away from retiring. And their wealth, they
• 3:53
  S2: were being made exceedingly wealthy by what was going on
• 3:56
  S2: in the housing market. But since then we've actually had
• 4:01
  S2: two more generations move through. Uh, millennials and Gen Z
• 4:05
  S2: and they've gone, what the hell? Boomers have become the
• 4:08
  S2: bank of mum and Dad, as well as some of
• 4:10
  S2: Gen Xers, and they've all gone. Hold on. When the
• 4:14
  S2: hell did housing get so expensive? I think around 2003,
• 4:19
  S2: the average mortgage in New South Wales was about 250,000.
• 4:24
  S2: It's now 860,000. So people have gone, oh, whoops. This
• 4:29
  S2: has got out of control. And I think that's like
• 4:32
  S2: there is a reason why Labor and Anthony Albanese and
• 4:36
  S2: Jim Chalmers have been talking about housing for the last
• 4:41
  S2: well since they came to office. They really did. Because remember,
• 4:44
  S2: they came to office in 2022 in 2021. The median
• 4:48
  S2: house price in Sydney had gone up by more than 30%
• 4:51
  S2: in 12 months. It's the biggest one year increase that
• 4:55
  S2: the country has seen since the late 1980s. So yeah,
• 5:00
  S2: that whole issue has really changed as well as the
• 5:04
  S2: political debate.
• 5:05
  S1: Okay. Well, I want to ask you, I guess, about
• 5:06
  S1: how this is landing politically because you are recording from
• 5:10
  S1: Parliament House, the seat of power, as it were, at
• 5:12
  S1: the moment. And one of our colleagues, Jack Maley, she
• 5:15
  S1: wrote about this issue of housing just last weekend. And
• 5:18
  S1: she had said at the time that this has been
• 5:20
  S1: tricky for the government, she said. Notably, Prime Minister Anthony
• 5:23
  S1: Albanese and Treasurer Jim Chalmers squirm when asked if lower
• 5:27
  S1: housing prices were the intent of the capital gains tax
• 5:30
  S1: and negative gearing policies introduced in the May budget and
• 5:34
  S1: now legislated. So this is tricky, right? Because she was saying,
• 5:37
  S1: you know, if you say that you do support a
• 5:40
  S1: drop in housing prices, you could be decried as a
• 5:42
  S1: wealth destroying socialist. But if you say, no, you're not
• 5:45
  S1: against it, you're setting yourself against what almost every economist, politician,
• 5:48
  S1: and ordinary person has acknowledged for years, which of course
• 5:52
  S1: is that property is completely unaffordable. So how does this
• 5:55
  S1: do you reckon land? What are you hearing there in
• 5:57
  S1: Parliament in terms of how this is landing with the
• 5:59
  S1: government and others.
• 6:00
  S2: Well, I think you're getting into the the conventional political
• 6:04
  S2: wisdom had been high prices are good for the incumbent,
• 6:08
  S2: but the term conventional wisdom actually means it's wrong. Conventional
• 6:12
  S2: wisdom is wrong. I think these two polls and what
• 6:15
  S2: Sky has also picked up is showing that the community
• 6:18
  S2: has actually moved on from that default position of the
• 6:22
  S2: major parties. And we can see, like Pauline Hanson, for instance,
• 6:25
  S2: has said, yep, house prices have had to fall. And
• 6:28
  S2: you've actually you've actually seen it in some of the
• 6:29
  S2: media complaints and the questioning, saying you're trying to destroy
• 6:34
  S2: the value of people's homes without. And they're taking it
• 6:38
  S2: from maybe their, their listeners or their readers or from
• 6:41
  S2: whoever's watching them. But you get once you get out
• 6:43
  S2: into the field and ask people, there's a whole different feeling.
• 6:46
  S2: And I want to touch on something else in the
• 6:49
  S2: polling because someone might say, well, you're asking this question
• 6:53
  S2: about house prices. It's we're not asking about what about
• 6:56
  S2: if your house price falls. Or the fact we did
• 6:59
  S2: ask this question. We did this in this specific one.
• 7:03
  S2: And again, the number, the proportion of people say, I don't,
• 7:06
  S2: I only want my house price to go up 15%.
• 7:10
  S2: So we're talking we've asked these people, your house, 15%, 17%
• 7:16
  S2: amongst those who own their own home. So that's telling
• 7:19
  S2: you hold on. The number of people saying house prices
• 7:22
  S2: continue to go up. That's a good thing. Is less
• 7:25
  S2: than 1 in 5. You don't win any election with
• 7:28
  S2: that argument.
• 7:29
  S3: So I'm just curious, how do you square.
• 7:31
  S1: That, that people across the age, demographics in particular are
• 7:34
  S1: for house prices going down? Like it's one thing, of course,
• 7:37
  S1: for people in the younger age groups, you would expect
• 7:40
  S1: them to want, of course, house prices to go down
• 7:42
  S1: because how else are they supposed to get into the market?
• 7:45
  S1: But how do you square that? The older people who
• 7:47
  S1: have answered this are also in support of house prices
• 7:51
  S1: going down.
• 7:52
  S2: I think Labour could claim that they've won the political
• 7:54
  S2: argument around the fact. And you can you hear it
• 7:58
  S2: from Anthony Albanese quite often. No one says to me
• 8:01
  S2: that the housing market is working properly. No one says
• 8:05
  S2: the housing market is not broken. And I think the
• 8:09
  S2: last ten, 15 years where we've got to this point,
• 8:13
  S2: the tipping point in terms of the political argument has
• 8:16
  S2: been reached, like the the the lowest support and this
• 8:20
  S2: is for lower house prices is amongst over 50 fives,
• 8:24
  S2: but that is still 58%. So more than half. So
• 8:29
  S2: you go. Yep. Even even older Xers and boomers. And
• 8:34
  S2: remember there are fewer boomers in the population now like
• 8:37
  S2: they are. They are dying. There's no way getting around that.
• 8:41
  S2: But over that, over 55, these two these few polls
• 8:44
  S2: are actually telling you the political argument for the last ten,
• 8:47
  S2: 15 years has, has finally seeped into the consciousness of people.
• 8:53
  S2: The fact that you've had a whole budget Really are
• 8:58
  S2: shaped around housing affordability. The government has been banging on
• 9:02
  S2: about this. Really, the population says the best way is
• 9:05
  S2: actually to make house prices cheaper.
• 9:12
  S1: After the break.
• 9:13
  S2: We have literally stuffed up housing for a generation more
• 9:16
  S2: than 30 years. We've really managed to do that all
• 9:19
  S2: by ourselves. And I think these sorts of polls are
• 9:22
  S2: suggesting that the public has woken up and said, we
• 9:24
  S2: just can't do it no more.
• 9:36
  S4: Virginia Giuffre helped vanquish a prince and a millionaire.
• 9:39
  S5: And I won't stop fighting. I will never be silenced.
• 9:43
  S4: But one of her toughest battles was a very private one.
• 9:46
  S6: It was the worst thing that could have happened to her.
• 9:49
  S6: Her children were her life.
• 9:53
  S4: Virginia, a podcast from the newsrooms of the age, The
• 9:57
  S4: Sydney Morning Herald and WA today out now.
• 10:05
  S3: So how might this.
• 10:06
  S1: Play for the coalition? I mean this is just one
• 10:08
  S1: more issue in which they can essentially not hammer labor
• 10:12
  S1: on for getting it wrong. Do you think.
• 10:14
  S2: I think they've got to change a bit of their
• 10:16
  S2: their argument in terms of don't follow the loudest voice
• 10:20
  S2: on talkback radio and say it's end of days with
• 10:24
  S2: house prices falling. The other thing in our polling, we
• 10:26
  S2: we did pick up that support for the government's capital
• 10:31
  S2: gains tax changes and its negative gearing changes. Support has
• 10:36
  S2: climbed over the last month. Opposition has fallen and there's
• 10:41
  S2: a bigger group who are unsure. So remember again a
• 10:45
  S2: huge amount of noise. So maybe the argument is getting
• 10:50
  S2: through to the public. Like these are still like it's
• 10:53
  S2: still tenuous. Like you're still not getting the huge support
• 10:57
  S2: for falling house prices that the rest of the poll shows.
• 11:00
  S2: But there is an awareness that those policies, the very
• 11:05
  S2: loud arguments against them that we're seeing in some quarters,
• 11:08
  S2: is actually going backwards, not going forwards in terms of
• 11:11
  S2: support for the change.
• 11:13
  S3: And Shane, I wanted to ask.
• 11:14
  S1: You, I mean, if this this trend in large percentage
• 11:17
  S1: of the electorate supporting the drop in housing prices, if
• 11:20
  S1: this trend actually is sustained, might this actually impact future
• 11:23
  S1: tax or political policy that could perhaps even bring a
• 11:27
  S1: greater drop in housing prices? Do you think.
• 11:30
  S2: In terms of the tax fall that falls on the
• 11:33
  S2: it hits the states because they're the ones who collect
• 11:37
  S2: stamp duty, but that is actually based on turnover. So
• 11:42
  S2: there is an argument that if you get more turnover
• 11:44
  S2: of housing stock, then you can offset the fall that
• 11:48
  S2: comes because of the drop in value. Local councils different story.
• 11:51
  S2: They're trying to value land. So like most rates council
• 11:55
  S2: rates are based off the value of land as opposed
• 11:58
  S2: to the house. On top of it. Lots of people think, oh,
• 12:00
  S2: my house is worth X. It's actually the land that
• 12:03
  S2: councils are trying to get at the value. So yeah,
• 12:06
  S2: there are ripple effects. Like the biggest ripple effect is
• 12:08
  S2: actually through the banking system. If you had a big
• 12:11
  S2: fall in the price of in the value of homes,
• 12:15
  S2: because our big four banks, their big real estate agencies effectively.
• 12:20
  S2: And so, so much of what they lend out on
• 12:23
  S2: is based on the value of the home. So this
• 12:26
  S2: would actually go, it would force those banks possibly to
• 12:29
  S2: rethink where they're going.
• 12:31
  S1: How might that look? Practically, what might it force banks
• 12:33
  S1: to do?
• 12:34
  S2: If you follow through the logic of the argument, you'd say, well,
• 12:37
  S2: you'd get a tightening of credit availability.
• 12:40
  S1: Right?
• 12:41
  S2: However, if the fall in the value of houses is
• 12:44
  S2: larger than the drop in credit availability, it means you
• 12:48
  S2: and I, Sammy, we go out to buy our dream
• 12:50
  S2: home together. We don't need as big a mortgage, so
• 12:55
  S2: the bank doesn't have to lend us as much. And
• 12:57
  S2: this is where part of the problem is. And I
• 13:00
  S2: think this is what's showing up in this these figures,
• 13:02
  S2: is that people look at more average mortgages that are
• 13:06
  S2: nationally around $750,000 and going, that's ludicrous. And it's hard
• 13:13
  S2: to argue with with that gut feel that a mortgage,
• 13:16
  S2: that size and the social ramifications. I think you and
• 13:19
  S2: I have talked about this. We know that it's affecting
• 13:22
  S2: fertility rates. Yes we have young people are coupling later
• 13:26
  S2: and they're putting off having children or they're not having
• 13:29
  S2: children because they have a mortgage they can't jump over,
• 13:32
  S2: let alone with a child or two in the on
• 13:35
  S2: their back. There's no way. So there are social ramifications,
• 13:38
  S2: let alone the fiscal and economic ramifications.
• 13:41
  S1: Well, this is what I wanted to wrap up by
• 13:43
  S1: asking you, Shane, was what economic ramifications might we see
• 13:46
  S1: a little bit down the track from this particular trend
• 13:49
  S1: or this feeling within the electorate?
• 13:51
  S2: Look, if all sides of politics are on side and
• 13:55
  S2: accept that. Yeah. We just can't keep driving up house
• 14:00
  S2: prices and, and looking at house prices as if it's, uh,
• 14:04
  S2: with down at the tab, like it's a betting market almost.
• 14:08
  S2: Then that element of the political debate that has really
• 14:12
  S2: been an issue for the last 20, 25 years may
• 14:15
  S2: actually quieten. And you'd think then that allows both sides
• 14:19
  S2: of politics to get into other policy issues where there
• 14:24
  S2: may be more economic or social ramifications, because, like, we
• 14:29
  S2: have literally stuffed up housing for a generation more than
• 14:33
  S2: 30 years. We've really managed to do that all by ourselves.
• 14:37
  S2: And I think these sorts of polls are suggesting that
• 14:39
  S2: the public has woken up and said, we just can't
• 14:41
  S2: do it no more.
• 14:42
  S1: So what does that mean that politicians will focus on
• 14:44
  S1: what instead? Might this better us in another way, that
• 14:47
  S1: these polls don't necessarily speak to economically people?
• 14:51
  S2: We talk a lot about productivity. Building a house is
• 14:54
  S2: not productive. Yet it gives us shelter.
• 14:56
  S1: Mhm.
• 14:57
  S2: But it doesn't enable the economy to grow faster, to
• 15:00
  S2: produce goods and services more efficiently.
• 15:02
  S1: And that's a big problem for us right now at
• 15:04
  S1: the moment. We are not having good productivity. We're not
• 15:07
  S1: having good economic growth.
• 15:08
  S2: No, no. Productivity has slowed to almost a standstill, partly
• 15:12
  S2: because we are spending as a community. We put more
• 15:15
  S2: and more money into bricks and mortar. So if you think, right,
• 15:20
  S2: we're not having we've decided, no, we're not going to
• 15:22
  S2: continue to do that. Well, where does where does the income,
• 15:26
  S2: where does money flow? It flows into ideas. It flows
• 15:29
  S2: into business. It flows into better services. So you can
• 15:34
  S2: see like the the share of the housing market as
• 15:38
  S2: a proportion of the overall economy. There are some estimates
• 15:41
  S2: that it's actually larger than the mining sector. What we
• 15:44
  S2: do around around housing, be it from construction to real
• 15:48
  S2: estate agencies to the the conveyancing industry. I think you
• 15:53
  S2: could mount an argument. That's probably not the best way
• 15:56
  S2: to use the national economic output. I think there are
• 16:00
  S2: better things to do than just Italian flash splashbacks in
• 16:04
  S2: the kitchen. Whether that's an important development or whether improving
• 16:08
  S2: our transport network, improving the just generating ideas that can
• 16:13
  S2: transform the economy and give people the prospect of employment
• 16:17
  S2: in the future. But I think that's where, like a policy,
• 16:20
  S2: a slow moving policy mistake for 30 years is finally
• 16:25
  S2: going to get addressed.
• 16:26
  S1: So this is the slow moving train crash, essentially. It's
• 16:30
  S1: finally coming to a halt. Is this what's going to happen?
• 16:33
  S2: I don't I'm not convinced. But there are positive signs
• 16:37
  S2: that maybe we've got there. Maybe.
• 16:39
  S1: What would you need to see to to be convinced
• 16:42
  S1: that yes, we are finally this this slow moving train crash,
• 16:45
  S1: which is to say economic policy that has driven prices
• 16:48
  S1: up and up and up for, you know, 30 or
• 16:51
  S1: more years. What would you need to see that would say, yes,
• 16:54
  S1: we're done with that now.
• 16:55
  S2: Well, you and I come back and do this podcast
• 16:57
  S2: in five years and we'll say, right. First, home ownership
• 17:01
  S2: is up. The average size mortgage is lower or has
• 17:05
  S2: not moved in that five years. Um, construction costs in
• 17:09
  S2: the housing sector have come down. There is more movement.
• 17:12
  S2: People are moving a bit more like we. There is
• 17:16
  S2: a clear sign that house, high house prices and the
• 17:18
  S2: stamp duties around them. They prevent people from moving around
• 17:23
  S2: and moving around to the jobs. The better paying jobs,
• 17:26
  S2: the jobs that are better suited to what they can do.
• 17:29
  S2: We can talk about the fact that home ownership rates
• 17:31
  S2: amongst people under the age of 35 have started lifting.
• 17:36
  S2: That would be the biggest test.
• 17:43
  S1: Thank you so much, Shane, for your time.
• 17:45
  S2: It is always a pleasure to talk to you, Sammy.
• 17:57
  S1: In other news today, gaps in major tech platforms monitoring
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