Hastie says ‘glimmer of hope’ as house prices fall

Andrew Hastie has acknowledged an expected fall in Australian house prices, already hitting Sydney, Melbourne and Canberra, is a “glimmer of hope” for those saving up to get into the market.

But the Liberal frontbencher said the price falls would not be good for buyers in heavy debt and at risk of owing more than what their home is now worth. Asked whether the slowing market was a good thing, Hastie told the ABC:

Well, it depends who you are. For a young Australian who has just managed to save up enough for a deposit, maybe that’s a glimmer of hope. But for young Australians who have just gotten into a house and are leveraged up to their eyeballs and they’re looking down the barrel of negative equity, I don’t think it would be all that encouraging.

Hastie said the Liberal party would solve the issue by cutting immigration and limiting new entrants in line with housing completions. He also discussed the causes of the downturn in prices, and said Labor’s budget was not the only factor:

I think confidence in the housing market has dropped since Labor’s announcement of new taxes that they ruled out before the last election, have sneakily brought in. I think that has diminished confidence.

But the larger geopolitical frame is also important. Inflation was already high before the Iran war but it’s higher and likely to get worse still.

Just before I came here I got an email from my bank saying my mortgage rate will go up in July. I imagine a lot of Australians have got the same email, so I think there is a lot of nervousness out there and that’s been reflected in the housing market.