00:01She was asked about that dip in auction clearance rates you referred to falling to 47% nationally
00:09last week, lower in some markets.
00:12She described that as a correction, pointing out that the housing market is cyclical after
00:20property analytics firm Cotality attributed the dip in auction clearance rates not only
00:26to Labor's plans to wind back tax breaks for property investors, but also rising inflation,
00:33the war in the Middle East and three interest rate hikes this year.
00:38The housing minister was also asked about the impact of the budget and changes to negative
00:44gearing and the capital gains tax discount on house prices.
00:47She pointed out house prices were already dropping in Sydney and Melbourne at the end
00:53of last year, so before May's federal budget, but that the Treasury analysis in the federal
01:02budget says house prices will still continue to grow, albeit at a slower rate, despite some
01:09forecasters projecting that the budget measures could see house prices drop by 10%.
01:15Claire O'Neill saying that it is a cyclical market and is currently in a period of correction.
01:23I think the housing market's cyclical in Australia, a very uncontroversial comment.
01:28We see periods of very significant house price growth and then we see the market make a correction
01:33and that's what we're seeing at the moment.
01:34So we're in a market correction now?
01:36That's correct.
01:37I don't think that's controversial at all.
01:38We've just been through what has been extremely high house price growth in the period from COVID,
01:45basically before COVID to today.
01:47House prices have gone up just in that time by more than 50% and we are seeing a correction
01:52on that.
01:54Now, the shadow housing minister, Andrew Bragg, said house prices are too high, particularly
02:00at the lower end of the market or the entry point, but said it's too early to tell what
02:06the long-term trends will be.
02:09It's a long game, housing, and I'm not sure that she's a forecaster, but certainly what we
02:15see in the entry-level housing is still persistently high prices.
02:20The government have pumped prime prices with their collapse of supply, but also their 5%
02:25deposits.
02:26And ultimately, until we see a larger amount of housing supplied, I don't think we're going
02:33to see price stability or affordability.
02:36Now, of course, this comes amid the backdrop of the federal government securing a deal
02:42with the Greens to pass the first tranche of its tax legislation through Parliament as
02:48soon as tomorrow, limiting negative gearing in the capital gains tax discount to new builds
02:53only, and also replacing the existing 50% CGT discount with a model that's hinged on
03:02real gains minus inflation.
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