Housing Minister Clare O’Neil says property losing value under Albanese government is a ‘win’ – as Opposition questions why the number of first home buyers is dropping

Housing Minister Clare O’Neil has defended Labor’s housing policies after Shadow Treasurer Tim Wilson accused the government of presiding over a decline in first home buyers.

During Question Time on Monday, Wilson asked O’Neil why ‘the number of first home buyers dropped by more than 6 per cent this calendar year’.

The challenge follows Australian Bureau of Statistics data showing first home buyer loan commitments fell to 29,319 nationally in the June quarter, down from 30,210 in the previous quarter. 

The decline was led by New South Wales, where first home buyer loans fell 7.4 per cent, while Western Australia recorded a 5 per cent drop and Victoria fell 3.3 per cent.

The Coalition has blamed Labor’s budget changes for a reduction of demand in the housing market, as prices fall across the country. 

In May, the Albanese government removed negative gearing from existing builds and also removed the 50 per cent capital gains tax discount, replacing it with a minimum 30 per cent tax indexed to inflation.

O’Neil rejected the criticism.

‘On average, there have been more first home buyers each and every year under our government than there have ever been under any other government in Australian history,’ she told Parliament.

‘We’re actually really, really proud of that.’

The minister pointed to the government’s expanded Home Guarantee Scheme, which allows eligible buyers to purchase a home with a 5 per cent deposit without paying lenders mortgage insurance.

The scheme was introduced by the Morrison government with income and place caps, before being significantly expanded by Labor.

‘This program has now helped 260,000 Australians get into a home of their own,’ O’Neil said.

The Housing Minister claimed the government’s tax changes had shifted the market away from investors and towards owner-occupiers.

‘For the first time in 25 years, first home buyers are standing on a level playing field,’ she said.

‘There’s a very simple reason that they’re winning. Up until this point those opposite have engineered a system where the young people of this country have been paying taxes to subsidise the investor next to them to outbid them at auctions every Saturday.’

‘We have brought that system to an end and we are damn proud to have done it.’

Her comments come as Australia’s housing market shows signs of softening.

Domain’s latest House Price Report found national capital city house prices fell 1.4 per cent in the June quarter, while combined capital city dwelling prices fell 1.3 per cent. 

Sydney house prices dropped 2.9 per cent and Melbourne prices fell 2.5 per cent over the quarter, marking the first broad downturn in more than three years.

O’Neil argued the cooling market was helping first-home buyers gain a foothold.

She pointed to a recent sale in Melbourne’s Footscray, where a two-bedroom house sold for $817,000 after being passed in at auction. 

The property’s reserve was set higher, at $835,000, before negotiations secured a deal with a young couple purchasing their first home.

‘The real estate agent said there was a bit of emotion when the vendors and the buyers met post auction, as the vendors had bought that as their first home, and they were handing it to a young couple who were after their first home,’ O’Neil said.

‘There are a lot of buyers around that are first home buyers, they are the ones that are still moving in a timely manner,’ the agent said.

The Coalition has rejected claims that the government was helping first homeowners, noting that following the budget fewer homes have been approved and the rents have increased. 

Shadow Housing Minister Andrew Bragg labelled Labor’s housing measures a ‘gimmick’, saying construction activity had fallen behind the pace achieved under the former Coalition government.

‘After four years, Labor is not building enough houses, with 30,000 fewer houses on average each year, compared to the previous Coalition government,’ Bragg said.

The Coalition argues Labor is falling behind on its housing target of 1.2million homes noting dwelling completions averaged about 211,000 homes a year under the former Coalition government, compared with around 173,000 to 180,000 a year under Labor.

Industry forecasts and independent estimates have suggested the government could fall between 250,000 and 285,000 homes short of its 1.2 million-home target.

Last week, Prime Minister Anthony Albanese defended Labor’s housing tax reforms by invoking Barefoot Investor Scott Pape, citing his description of negative gearing and capital gains tax concessions as ‘taxpayer-funded landlord welfare’ and arguing that homes should be places to live, not speculative assets.