Treasurer Scott Morrison
has heralded the Coalition’s calibrated policy approach to rectify rampant housing growth and slammed Labor’s proposals as having a potentially devastating effect on the nation’s property market.
Speaking at a joint press conference on the Mid-Year Economic and Fiscal Outlook (MYEFO) in Canberra on Monday (18 December), Morrison said he was “encouraged” by what he saw in the housing sector.
“You'll be very aware of the measures we took early in the year with APRA, which has had the desired effect of cooling the more enthusiastic element of the market in the investor side, particularly in Sydney and Melbourne.”
This approach has had the desired effect in hotter housing markets without damaging smaller regions such as South Australia, Hobart or Western Australia, he said.
“So with the slightest change to interest-only lending we've seen Sydney house prices fall from double digits from 15 per cent to five per cent in six months.”
This was achieved with the “slightest, calibrated, scalpel-like” changes to macro-prudential policy, Morrison said.
“Can you imagine what the impact would be on Australia’s housing markets if you got out the tax sledgehammer, increased capital gains tax by 50 per cent, and removed negative gearing?”
This approach under Labor’s proposals would cause “serious damage” to the housing market and destroy consumer confidence, he predicted.
Globally, investors and ratings agencies have expressed concern about a hard landing in the Australian housing market which is something the Coalition has worked hard to avoid, he added.
“Now, the actions we've taken, both with the housing affordability package in the Budget this year, and the measures we've taken with the banks but particularly with the regulator has meant we’ve been able, so far, to ensure a soft landing of those markets which is good for the economy.”
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