Peter Dutton is pressed on his comment about wanting house prices to continue to rise. Does he mean in line with inflation?

Dutton:

We want sustainable growth. Bridget. If you’re buying a house today, if you can find one and if you can afford one under this government – you don’t want to wake up in two years’ time and find that the value of that house has gone down.

We don’t want that situation for Australians.

We want a home to be an asset where you can raise a family, where you can use it as security to the bank if you want to start a small business in a back bedroom or the garage.

We want it to be an asset that increases in value as you get toward retirement and ultimately, one day, you can leave to your children as an asset that will help them in their lives.

So, home ownership is absolutely integral to our culture and to who we are.

Putting aside that Dutton is not a relative political newcomer and has been in the parliament for the last 24 years and in government for about 15 of those 24 years, and therefore directly involved in policy and none of this situation was created in a bubble and it is not the creation of the last three years.

During the 1990s house prices only went up around 0.3% more than household income each year. Since 2000 (and the intro of the CGT discount) house prices have gone up on nearly 9% more each year than household income.

That is not sustainable.

A house in Melbourne costs 8 years of average wages. Twenty years ago, it was five years, and if we keep going at the same rate, a house in Melbourne will end up costing 13 years’ worth of average wages in twenty years’ time.

That is not sustainable.

If you were on average full time male earnings in Sydney at the end of 2014 and started saving 15% towards a deposit, you needed around $154,000 for a median priced house. Now 10 years later you would have saved $126,000 but guess what? You now need an extra $156,000 more to get a deposit. So after 10 years of saving you are $1,000 further away from your target.

That is not sustainable.

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