Federal election 2025: Housing debate fails to nail down answers

Labor and the Coalition have shirked questions about how to define “sustainable” house price growth and failed to provide certainty on supply-side targets in a heated debate.

Going head-to-head at the National Press Club, Housing Minister Clare O’Neil and her Coalition counterpart Michael Sukkar on Wednesday traded barbs, accusing each other of overseeing the housing crisis while talking up their respective policy offerings.

Housing is one of the key issues this election, and both Prime Minister Anthony Albanese and Opposition Leader Peter Dutton have visited numerous housing construction sites in the last few days after both unveiling their latest announcements.

Experts have taken aim at both Labor’s expansion of the five per cent deposit scheme and the Coalition’s tax deductible mortgage policy, saying both will drive up house prices and don’t do enough to tackle supply.

Both sides have accepted their policies would have some impact on prices, but when pressed on Wednesday couldn’t put a figure as to what is an acceptable level of growth. Neither would be drawn on whether falling house prices would be the best way to improve affordability.

“We’ve got a generation of young people who have come into the market in the last ten years. Many of them have taken on incredibly large mortgages while interest rates were low, and we don’t want . . . to see that generation go into negative equity,” Ms O’Neil said.

“I’m not going to put a number on (sustainable house price growth), but it’s really important that we see wages going up faster and us building more homes.”

Mr Sukkar agreed it would be “quite devastating” for a first-home buyer go suddenly go into negative equity.

“What I have said very clearly is you absolutely want wages growing more quickly than house prices . . . What we need to see is a period where wages growth sustainably outpaces housing growth,” he said.

But wages would need to grow at a substantially faster rate than house prices to ensure affordability.

According to housing commentator Tarric Brooker at two per cent annual house price growth and three per cent wages growth, a median income earning couple would have to wait 86 years before the median priced house was as affordable as it was in 1999. Writing on X, Mr Brooker’s analysis was described by veteran economist Chris Richardson as “truly depressing”.

“At the moment the policy pendulum hasn’t swung in the direction of your children. Or your kids’ kids,” Mr Richardson wrote.

At the debate, Mr Sukkar confirmed that should the Coalition win Government, they won’t have a housing supply target like Labor’s 1.2 million by 2029 goal, saying politicians too often say things they can’t deliver.

“We have to accept that one of the reasons that there is diminishing trust against politicians in this,” he said.

“One of the reasons we’ve seen that happen is because so often, governments make commitments for things that they will never be held accountable for.

Mr Sukkar said he won’t “insult the intelligence of Australians and put in place a target” he won’t be responsible for in 10 years time.

“I’m certain it will be higher than Labor . . . I wouldn’t want to set an unrealistic expectation, which I fear the Labor Government has,” he said.

The Government is currently projected to fall 160,000 homes short of the National Housing Accord target, although that does show an uptick.

Ms O’Neil said Australia “needs a bold and ambitious target because boldness and ambition is exactly what is required here, instead of washing our hands of the problem”.

The pair also duelled over the cost breakdown of Labor’s $10 billion pledge to build 100,000 homes exclusively for first home buyers.

Treasurer Jim Chalmers had earlier promised voters full costings of the policy would be revealed closer to the election, amid questions about where the money will come from or if it is offset with any savings.

Ms O’Neil clarified that the money would not cover the total cost of new homes, but would go towards ensuring developers could build the homes in the first place and get returns.

She also took aim at the Coalition’s super for housing scheme, saying it will “significantly disadvantage women” in addition to overheating the market.

“Not only will it jack up house prices instantly by giving millions of people the ability to ransack their retirement savings but it’s also going to significantly disadvantage women when they’re at an auction bidding against a man. And that can’t be a good thing for gender equality” she said.

The debate came shortly after the Australian Bureau of Statistics revealed just 168,050 new homes commenced construction in 2024, well below the 250,000 annual homes targeted by the Government in its Housing Accord and remaining at the lowest levels in over a decade.

During the debate, speakers were accused of “tinkering at the edges” and Jocelyn Martin, chief executive of the Housing Industry Association said it demonstrated that the parties were too busy “quipping” and should spend more time collaborating.

“These two policy announcements are the perfect example of why we need a bipartisan approach to housing. If you choose one, you probably take a bit of this and a bit of that. If we just sat around the table and worked out what was best, we’d get a long way,” she said.

“If housing is a housing is a human right, if it does contribute to social improvements in education and employment, and all those other opportunities that they say it does, then why can’t we have that discussions.”

Ms Martin said that the details continued to be light on both policies, with not enough emphasis on ensuring supply.

That was particularly the case with competing priorities, such as the Coalition’s intention to end the Housing Australia Future Fund, which would create uncertainty for builders who had to plan for the long term.

“If you’re running a small or medium sized business, or even the volume guys, they just want consistency.

“If they’re buying land, and then planning estates, it’s a long game and they’re constantly worried about what the government is doing. Have some solid strategy and consistency, instead of quipping with each other,” she said.