PHOTO: Australian house prices
The claim
The seemingly inexorable rise in house prices has been the subject of political debate for decades, with many blaming Australia’s tax rules for favouring investors at the expense of first home buyers.
In a July 30 tweet, Greens leader Adam Bandt claimed house prices are rising by $1,200 a day, warning that younger workers have been locked out.
“House prices are going up $1200 a day,” Mr Bandt said. “Great for property investors, a disaster for every casual worker with smashed savings.”
Is it correct that house prices are rising by $1,200 a day? RMIT ABC Fact Check investigates.
The verdict
Mr Bandt’s claim is overreach.
While his claim accords with the average daily increase in the median house price in Sydney, the situation in the rest of the country is different.
For the eight out of 10 Australians who do not live in Australia’s largest city, on average prices are rising at less than half that pace.
Depending on the measure used — and the timeframe applied — median house prices for Australia’s eight capital cities are rising at an average daily rate of between $465 and $576, and at lower rates in areas outside the state capitals.
Background to the claim
Mr Bandt’s claim came just days after federal Labor junked a controversial plan to make housing more affordable by tightening negative gearing rules and reining in the capital gains discount for assets held for at least 12 months.
Australia’s tax treatment of housing has long been criticised as overly generous for investors and distortionary, with investment properties often effectively taxed at a lower rate than income from other sources, such as wages.
Negative gearing rules, for example, allow investors to use losses on rental properties to offset taxable income.
Further, when an individual sells an investment owned for at least 12 months, only 50 per cent of the capital gain is subject to capital gains tax, under laws introduced by the Howard government in 1999. (Under Labor’s proposal, this would have been increased to 75 per cent).
Two days after suggesting that house prices had been rising by $1,200 a day, Mr Bandt made a similar claim on Twitter.
“Supercharged by tax breaks for investors, house prices are shooting up more than $1,000 a day,” he wrote.
“[M]illions of Australians are seeing the dream of home ownership become a nightmare.”
Measuring house prices
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