Sally Sara:
Prices have fallen in all capital cities for the first time in 15 years. That’s according to new data from listings company Domain. Prices across the capitals fell 4.7 per cent in the September quarter, wiping almost $60,000 off the median price of a home. Chief economist at accounting and advisory firm William Buck, Besa Deda, says several key factors have contributed to the price fall.
[Excerpt]
Besa Deda:
The number one factor is really interest rates. Interest rates bite usually the hardest, but it’s also the case that there’s changes to tax from the federal government, which has added to weak buyer sentiment around housing. And it’s also the case that unemployment’s rising. It’s still very low historically, but it’s near 5‑year highs. And that is a factor that’s also starting to contribute.
[End of excerpt]
Sara:
That’s Besa Deda, who was speaking to the program earlier this morning. Chief economist at accounting and advisory firm William Buck. Meanwhile, the Reserve Bank Deputy Governor Andrew Hauser warned yesterday of, quote, ‘a central banker’s nightmare amid signs business sees higher inflation as the new normal’, fuelling expectations of another interest rate rise next month. Clare O’Neil is the federal Minister for Housing, Homelessness and Cities and joins me now. Minister, welcome back to Breakfast.
Clare O’Neil:
Good morning, Sally. Really good to be with you.
Sara:
Before we talk about housing, independent federal MP Helen Haines, of course, remains in hospital after being struck by a vehicle outside her electorate office. While separately, police have arrested a man yesterday after he reportedly made verbal threats while armed with nunchucks in the electorate office of WA state MP Hannah Beazley. How do you reflect on the safety concerns that politicians are grappling with across the country, particularly female members of parliament around the country?
O’Neil:
Thanks, Sally. I think there’s a real, understandable thirst and desire to look at the policy implications and the political implications of what’s going on at the moment. My main experience of this right now is as a human being and a person first. And Helen Haines is a friend; she’s a colleague, and she’s still in hospital right now. We’ve just heard this devastating news last night that she’s going to lose both of her legs.
And I speak for all politicians in the country right now, and I think for all Australians, when I just wish her beautiful husband and their family every good thought. There is a very steep climb ahead for Helen, and so I just – I want people to understand the main experience that I’m having right now is sadness and grief for Helen and her family and what they’re going through.
What has happened to her is a watershed moment for our country, and I think a moment of reckoning for how we treat each other. I say that not just about how we treat each other as politicians and how we think about this as a political issue. I feel the social fabric of our country is being stretched right now and we have to find a pathway out of this as a nation. This is not just about politics and politicians. Anyone who is in a service role, who has an interface with the public right now, will tell their own story of how this is affecting them, whether it’s ambos, whether it’s people working at Coles and Woolies, for God’s sake. We are losing that beautiful sense of egalitarian civility that makes our country so great. And we do need to have a really deep national conversation about how we are going to manage what’s being thrown at us as a country and how we’re going to do this in the Australian way and treat each other with the respect that we deserve.
Sara:
Why do you think this is happening? And I’m interested too. You have talked more broadly, and that’s an important point: that other people doing their jobs have experienced abuse, harm, significant physical violence as well. What is going on?
O’Neil:
It’s important to remember that hatred and anger and aggression are a part of our community and they always have been. I think back to. I got my start in politics very young. I was elected the mayor of my local community when I was 23 years old. And a couple of days after that election, I received a letter in the mail of the most hateful, sexualised, vile abuse that I’ve ever read in my life. And I still haven’t ever actually told anyone what was in that letter. If I go back to that time, that was, you know, 20 years ago, the person who sent me that had to go through the trouble of literally handwriting this vitriol on a piece of paper, putting it in the mail and sending it to me. Well, that equivalent person today is sitting in front of a laptop, spouting that type of abuse, potentially dozens of times a day, and doing it in an environment where that kind of language has been normalised.
So, there’s lots of causes of what’s going on here. There’s a lot of legitimate discussion about how politicians treat each other. We cannot escape the fact that we live in a world where one of the main influences on our life is companies making billions of dollars off making Australians angry and disrespectful towards one another. There has to be a reckoning on that front. We cannot allow this to continue. It’s not just the issue about aggression. As a parent, I have lost the capacity to control what my own children see and experience of the world. That’s something I believe is my right as a parent, and I’m losing that because of the internet.
We do have to have a conversation about how we’re going to deal with this as a country. We are so lucky to live in Australia, you know, for all the aggression and all the issues that we’re talking about this morning. Sally, I would always prefer to be in Australia dealing with this than any other country in the world. But we’ve got some big issues here, and we have to find a pathway out of it together.
Sara:
You’re listening to Radio National Breakfast. It is 19 minutes to 8, and you’re listening to the federal Minister for Housing and Homelessness and Cities, Claire O’Neil. Let’s turn back to your portfolio. Domain says combined capital city house prices fell 4.7 per cent in the September quarter. That’s the steepest quarterly fall on record. The government vowed to lower barriers to the market for first‑home buyers. Are you pleased by these falls or are there concerns for you? How do you see it?
O’Neil:
Well, the housing market in Australia is a cyclical market. We’ve talked about this previously, Sally, and I think this is the third or fourth downturn in house prices that we’ve seen just in the last decade. So, that’s the starting point for this conversation. I think we also need to give what’s going on for prices in Australia a bit of context. And if you don’t mind me saying, it is unfair to report about house‑price growth looking at this: just in the last 6 months, we have seen 400 per cent house‑price growth across Australia since the year 2000. 50 per cent house‑price growth since the beginning of COVID. If we just spare a thought for the young people of this country who are desperately trying to save a home deposit.
House prices have grown at roughly double the weight – the rate of wages, certainly since that post‑COVID period. In fact, one example I just want to give you: in the year 2025, house prices in Perth went up 25 per cent in one year. And I just want to be direct with you and the Australian people. We cannot sustain that level of house‑price growth across our country. If we let house prices grow by 400 per cent for another generation, our nation will be unrecognisable to us in terms of equality and opportunity.
Now, the government having, you know, seen the Commonwealth government basically completely tap out of engaging with housing. Our government is the most active and engaged Commonwealth government on housing that we’ve had for 70 years. We are changing the housing market. So, first‑home buyers have much better opportunities. But that’s not all we’re doing. I just yesterday announced billions of dollars of housing infrastructure in Victoria. We are building more homes. We’re getting home buyers a better deal also, but there’s still a long way to go here, and I acknowledge that.
Sara:
And if we’re going back to the prices here, is it good news from the government’s perspective that they’re coming down after the rises over the past few years that you’re describing?
O’Neil:
Look, I don’t commentate on the day‑to‑day or the month‑to‑month of house prices in Australia. What I can tell you is over the medium and long term, we cannot sustain 400 per cent house‑price growth. We do need to slow house‑price growth around Australia. And if that is controversial to you, I’m happy to wear the controversy. We just can’t sustain a situation where we’re seeing house‑price growth at that level.
Sara:
What about for the people who had to pay those prices to get into the market? Are you concerned about negative equity?
O’Neil:
Well, with negative equity, I just refer you to the Reserve Bank Deputy Governor Sarah Hunter’s comments very recently, where she said that there are historically very low numbers of Australians in negative equity. And Sally, if I go back to the downturn we saw in 2019, about twice the number of – twice the share of Australians were in negative equity at that time than they are right now. I didn’t hear the media make much comment on it. So, we’ve got a significant issue with housing across our country. Again, I’d invite you to put it in context. House prices are softening around the country. They are still on average higher in Australia than they were a year ago. You don’t read that a lot in the media reporting.
Sara:
Should homeowners brace for a lengthy downturn? What do you think?
O’Neil:
Well, I would invite you to talk to the very many economists who come through your show and are more in the world of hypotheticals. What I will just tell you is that every single piece of analysis that I have read about this indicates that house‑price growth will continue over the medium term. It will continue just a bit slower than it would otherwise have because we have put first‑home buyers on a level playing field for the first time. That is a good thing for our country.
Sara:
But with interest rates going up, are all those home buyers able to enter the market? Are the falls being cancelled out by the interest rates going up and inflation?
O’Neil:
The changes that we have made to the housing market are permanent changes that, for the first time at every auction around the country, put a first‑home buyer on a level playing field with an investor. If I just take you back to where we were before the federal Budget, we were asking the young people of this country who cannot save a home deposit to pay taxes to subsidise investors to buy their second or fifth, or 10th property. That is wrong. And we need a situation where public policy supports the first‑time buyers of this country to get into the market.
That’s exactly what we’re doing. Not just the level playing field, but the 5 per cent deposit program and Help to Buy. Sally, just one thing I want you to know, because I feel like there’s a lot of bad news in housing a lot of the time. Under our government, we’re getting on average more first‑home buyers than we’ve ever seen in Australian history each and every year. And I expect that to continue because of the policies we have in place to make corrections here.
Sara:
In your view, how significantly has the government’s tax reforms contributed to this steep fall in housing prices we’re seeing right now?
O’Neil:
Yeah. So, I’d just bring you back to what was in the Budget. A lot goes into house prices in Australia. The dominant driver of what changes from month to month and year to year is what goes on with interest rates. The tax settings are a part of this, and the Budget suggests about a 2 per cent slower growth rate than we would otherwise have seen with the tax changes that the government has made. What we get for that is 75,000 households go from renting into home ownership. And that adds to the hundreds of thousands of people that we are helping in through the 5 per cent deposit program.
Sara:
Let’s talk about renters. While property prices are falling, rents continue to rise. Cotality says they’ve surged almost 40 per cent over the past 5 years, with renters being asked to pay on average $200 a week more than they were in 2021. What is the government going to do to help renters who are in their millions in Australia?
O’Neil:
Yeah, super important question. And you know, when we look at what’s going on in housing in our country, it’s really renters who are suffering the most. They are experiencing not just the rental issues that you’ve spoken to there, but a long period of time where home ownership is getting further away from their reach rather than closer to it. So, what do we need to do for this community of people? We need to support the million households around the country who are doing it toughest through Commonwealth Rent Assistance. We’ve raised that by almost 50 per cent since we’ve been in office.
We need to build more homes because just if I could ask people to think about this, conceptually, the more homes we build, the more affordable housing is for every Australian. And that’s why you’re seeing our government not just jump in to support renters to become first‑home buyers, but undertake massive expansions of the government’s role in building homes. We are building 55,000 social and affordable homes, something the Commonwealth hasn’t done in many decades. And we are working with the states to build lots more entry‑level homes so that first‑home buyers and renters have that chance that they really deserve, which is actually to get the keys to their own home. And that’s the thing they tell us they want most of all.
Sara:
Just finally, on a separate issue, 2 major vulnerabilities in programming language, PHP, have been discovered, and websites across the world are being urged to implement a fix as soon as possible. Australian Government websites, including that of the Australian Signals Directorate, have also been affected. How concerned is the government about this?
O’Neil:
Sally, I haven’t got a proper briefing on this one, and I’d probably prefer the Home Affairs Minister to talk to you about that. One thing I just can tell you is we have some of the finest cybersecurity officials in the world working for the Australian Government. We’re really proud of the work that they do to keep us safe, and I know that will continue.
Sara:
Clare O’Neil, thank you for joining me this morning.