Under questioning from the Greens Spokesperson for Finance, Senator Peter Whish-Wilson, the Treasury Secretary John Fraser said that, for Sydney and parts of Melbourne, the housing market was ‘unequivocally’ a bubble.
When Senator Whish-Wilson later questioned the Reserve Bank, Assistant Governor Malcolm Edey added that “…a lot of people do think it’s a bubble – serious people think that – and we agree that this is a situation where the market is strong, it’s overheated, it’s a risky situation…”
Senator Whish-Wilson said, “Overheated prices are not only a risk to financial market stability, they are proving a barrier to prosperity for so many young and less-well-off Australians by keeping them out of the housing market.
“Tony Abbott and Joe Hockey can’t ignore this housing crisis any longer. And with economic woes on the horizon the government needs to look at what policy changes it can make.
“It is pretty clear the RBA is now wedged between not blowing up the Sydney bubble further and trying to stimulate the economy of the rest of the country.
“This means the solutions must lie with government action and not the RBA," Senator Whish-Wilson concluded.
Senator Scott Ludlam, Australian Greens housing spokesperson said today, “Despite the Prime Minister’s hopes that housing prices are increasing, the reality is that there are thousands of people stuck on emergency social housing waiting lists and that Australia is facing a housing affordability crisis.
"The recent Senate Inquiry into affordable housing has established that the tools currently exist to address housing affordability, but despite this, the Abbott Government has its head well and truly in the sand.
“The Senate Inquiry specifically called for an inquiry into the costs and impacts of negative gearing, particularly on renters, including the option of phasing it out, but Tony Abbott is maintaining his phobia of including negative gearing or capital gains as part of a broader tax discussion.
“This year’s budget failed to reverse any cuts to housing affordability programs, and the government continues to overlook the jobs and innovation potential that would be created by investing in the prefabricated construction industry, which could support the affordable housing, construction, manufacturing and sustainable timber sectors.
“It’s time for Tony Abbott to show some level of interest and leadership in this growing crisis,” Senator Ludlam concluded.