$34.1 billion – that is the amount wiped off the value of Australian residential property in the last quarter, according to the Australian Bureau of Statistics.
In dollar terms, that’s the equivalent of Coles vanishing entirely from the Australian stock exchange.
Major economic forecasters are now projecting peak-to-trough national price falls of up to 13 per cent.
In Sydney, home values have already dropped over 7 per cent from their peak.
Housing market corrections happen from time to time, usually due to changes in market conditions.
But this time around, the housing downturn is not the result of cyclical factors.
It is a design feature of Labor’s Budget of Broken Promises.
By removing negative gearing on established houses and by unwinding long-standing capital gains tax arrangements, Labor has made structural changes to the housing market that have drained confidence and driven out investment.
When announcing these changes, Treasurer Jim Chalmers quoted Treasury analysis to claim that these new taxes would only result in a “small and temporary slowing in house price growth.”
The early signs are that we may be looking at something much more serious: we have the prospect of a housing market crash.
The biggest challenge to housing affordability is the fact that supply has not kept up with demand.
But what Labor’s changes have done are only further undermining housing supply.
By smashing investor confidence, this Government has choked off the very capital required to build new homes.
Developers cannot secure pre-sales to fund new projects because private investor demand has evaporated.
Institutional builders are pulling back because falling prices are undermining the financial viability of new housing projects.
When you scare away private investment, you do not create more housing. In the middle of an acute national housing shortage, Labor has ensured fewer slabs are poured, fewer frames are erected, and fewer keys are handed over to first-home buyers.
And this damage is not just limited to new housing. Construction is one of the largest private-sector employers in NSW.
When home building stalls, local subcontractors lose work, apprentices are let go, and small businesses across Western Sydney and regional communities feel the squeeze.
Finally, there is a devastating impact on consumer confidence.
When families see tens of thousands of dollars stripped from their most valuable asset within a matter of months, they tighten their belts. Retail suffers, hospitality contracts, and broader domestic demand suffers, creating ripple effects across the entire economy.
You cannot tax your way into housing affordability, and you cannot punish property investors while expecting builders to keep building.
The Coalition wants young Australians to have the chance to buy a home.
But we will do this by boosting supply, not by crashing the market.
Our plan is simplify the National Construction Code, while preserving core safety standards, to cut the cost of building a new home by up to $70,000.
Our plan is to establish a $5 billion Housing Infrastructure Fund to help unlock new homes by funding essential last-mile infrastructure, such as water, sewerage, power and roads.
Our plan is to cap net overseas migration each year below the number of new homes completed, so we can ensure Australians are in the front of the queue.
Our economy is already stalled. The ‘reverse wealth effect’ engineered by Labor threatens to send it into reverse.