The ABS House Price Index* released today confirmed house prices are falling, with both Brisbane and Melbourne down 2.5 per cent QoQ and the eight capitals down 1.7 per cent QoQ overall.
“While the price fall is modest it confirms the new downward trend in house prices is firmly established and will proceed rapidly from here,” Prosper Australia campaign manager David Collyer said today.
“The federal government has no further market interventions available. A fresh first home buyers’ grant would be met by derisive howls from young adults. They have learned such trickery merely inflates prices by at least the size of the grant.
“A cut in interest rates would prompt universal withdrawal of overseas funding from our banks. These are now over a quarter of bank liabilities.
“The boosters and spruikers of the property industry have suddenly flipped to a new narrative, that this modest change makes real estate a ‘buyers market’.
“Their claim is utter garbage. They should hang their heads in shame. This self-serving argument is an attempt to coerce naïve buyers to commit to a lifetime of debt at the peak of The Great Australian Land Bubble.
Prosper Australia’s Buyers Strike and repeated warning – Don’t Buy Now – addresses prospective home buyers trying to negotiate the traps and pit-falls on the road to home ownership.
“House prices have a very long way to fall to become attractive. I say, house prices at three times buyers income is a neutral market and at 2.5 times is a buyers market. These targets remain a long way off.
A third of adults are renters. While not every renter aspires to home ownership, all are excluded by high land prices. This is an abuse of the idea of citizenship in a property-owning democracy and our profound national commitment to opportunity for all.
“Prosper sees no reason why young Australians should pay grossly inflated prices for homes just so vendors can exit with their unearned wealth intact.
“I take no joy in the widespread economic destruction the bursting of the bubble will bring. The villain in this drama is the tax system, a scheme that advantages land speculation over genuine investment and wage-earners,” Collyer concluded.
*ABS 6416.0 – House Price Indexes: Eight Capital Cities, Mar 2011
About Prosper: Prosper Australia is a tax reform lobby group and think tank that is now 120 years old. It seeks to move the base of government revenues from taxing individuals and enterprise to capturing the economic rents of the natural endowment, notably through Land Value Tax and Mining Tax.