Markets 
It’s the million-dollar question that nobody can answer. For weeks, politicians of every ideological ilk have been asked: do you want property prices to go down?
There is no right answer to the question, which is precisely why no one will answer it.
Say yes, and you would be decried as a wealth-destroying socialist. Say no, and you are setting yourself against what almost every economist, politician and ordinary person has acknowledged for years: the Australian property market is acutely unaffordable, to the extent where it’s affecting social cohesion.
So far, attention has focused on the trickiness of the government, notably Prime Minister Anthony Albanese and Treasurer Jim Chalmers, who squirm when asked if lower housing prices were the intent of the capital gains tax and negative gearing policies introduced in the May budget, and now legislated.
Asked by Insiders’ David Speers if he would be worried about a 10 per cent drop in prices, Chalmers said that “we’re not aiming for a particular aggregate outcome in price or percentage”. On Channel Seven’s Sunrise program, Chalmers would allow that prices were “softening in the two big markets, Sydney and Melbourne”.
But there has been less attention on the politicians who are happy to mutter darkly about a “crash” in house prices, or even the hypothetical prospect of home owners going into negative equity.
They have been ably assisted by a media campaign from predictable quarters, which is scouring the country to come up with someone, anyone, who has been pushed into negative equity by the government’s tax changes. So far, little success. (Interestingly, those who promote personal responsibility in other policy areas don’t seem to apply the principle to home buyers who have taken on so much debt that they can’t withstand a dip in property prices of a few percentage points.)
These politicians won’t, of course, answer the inverse question – were they happy to see house prices continue to rise at record rates, outpacing wages and locking more and more people out of the market? Politicians can’t, or won’t, answer the question, but ordinary voters will.
Polling by diverse outlets – from Sky News to this masthead, shows that most people think house prices need to come down. The issue came into focus this week because we finally had some data on the previously vibes-based chatter about the backslide of the property market.
Cotality released research showing house prices across the country fell by 0.4 per cent in June, which was the largest monthly fall since 2022.
This discourse inevitably centres around the Sydney and Melbourne markets, which have suffered losses of 1.5 per cent and 1.3 per cent respectively over the month of June.
Sydney is down 4.2 per cent since the start of the year, which is mostly notable because we are so used to Sydney prices going up, and very rarely down. Canberra prices also dipped, but prices in the other capital cities continued to grow. Perth has seen an annual increase in property prices of 23.6 per cent!
Sydney and Melbourne are the biggest property markets, sure, but in Sydney in particular, the obsession with property is something beyond the sum of its parts. Here, watching the property market is a pastime that sits somewhere between blood sport and gambling problem, depending on your point of view, or more importantly, on your loan-to-value ratio.
We love to envy-read stories about the multimillion-dollar house trades of the rich and famous, with their steam rooms and brushed brass tapware.
For all our self-mythologising about the value of a hard day’s work, we accept that property investment is the best way to get wealthy in this country.
The Australian Financial Review’s 2026 Rich List demonstrated this aptly – of Australia’s 178 billionaires, a quarter built their wealth in property, and property was the second-most common way to make the top 200 rich listers in 2026.
But it’s not just the billionaires and multimillionaires who have joyfully surfed the property wave over the last three decades or so. Many ordinary Australians have become financially comfortable through investing in their family home, or, if they’re very fortunate, in an investment property on the side.
Nowadays, Baby Boomers are denigrated as the wealthy, entitled generation who enjoyed free higher education, the benefits of Hawke/Keating-era economic deregulation, as well as the middle-class welfare largesse of the Howard years. This is all true.
But we forget that many working-class people of the Boomer generation were able to clamber their way to prosperity via the seemingly-endless property boom. When living standards lift, it doesn’t just mean that privileged people get more pampered. It means that a greater chunk of the poor and the working class can see their way clear of financial insecurity.
Which brings us to the present day, and the precise reason we are having such a heated debate about the heat coming out of the property market (at least, in Sydney and Melbourne, and easily forgotten Canberra).
Growing wealth through property is only an option if you can get into it. Living standards are no longer lifting, they’re going backwards, and the mining boom-fuelled largesse of the ’90s and noughties is unimaginable now.
It is easy to get lost in the blizzard of statistics reported on the economics of the property market.
But last week my colleague Shane Wright highlighted an extraordinary figure that stuck out: a projection calculated by AMP deputy chief economist Diana Mousina.
She had calculated how long it takes an average earner to save a 20 per cent deposit for a median-priced house. In 1983, it took 3.5 years. By 2000, it had climbed to 5.7 years. Today it is 11 years, and if it continues to rise at the same rate, by the mid-2050s, it would take 24 years to save a deposit. Oh, and the median house price in this dystopian future? $6.2 million.
If it makes anyone feel any better about the government’s tax changes, housing affordability is still at an all-time low, which is another way of saying that home owners are still wealthy.
It doesn’t help that the Labor front bench doesn’t seem to be able to get its story straight on the intent of its policy, instead pointing vaguely to Treasury modelling which predicts that “prices will continue to grow but a bit more slowly”, in Chalmers’ words.
At a time of political anxiety and social upheaval, a dip in housing values does feel existential. For those of us lucky enough to own homes (or at least, half-own them with a bank), having that security threatened in any way, feels, well, threatening.
But a home is not just a wealth-accumulation vehicle. It is a base, a sanctuary where we can raise children, and from which we can put down roots in a community. Housing security is the bedrock of all functional, happy societies. Civil society is impossible without it. If younger generations can’t trust that they will be able to achieve it, they won’t trust much else either.
Jacqueline Maley is an author and columnist.
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