Treasurer Scott Morrison has linked housing affordability to Australia's birth rate, suggesting would-be home buyers are delaying having kids so they can get into the property market.
Subscribe now for unlimited access.
$0/
(min cost $0)
or signup to continue reading
But Mr Morrison has - once again - poured cold water on the idea that axing negative gearing tax concessions is the way to lower barriers to entry into the property market.
He also rejected suggestions investors are causing a property bubble, just days after new data showed the share of loans taken out by investors had climbed back above 50 per cent for the first time since the prudential regulator took action in 2015 to curb bank lending to would-be landlords.
Instead, Mr Morrison blamed a lack of supply for new housing for surging house prices in Sydney and Melbourne.
Ahead of the May 9 budget, the federal government is working on a package of housing affordability measures including the possible creation of an Affordable Housing Finance Corporation, a ban on foreign investors owning more than half the apartments in a development, and a measure designed to encourage pensioners to downsize through favourable superannuation treatment.
The Treasurer said high house prices, particularly in Sydney and Melbourne, had ramifications for the entire community and that people were struggling to save a home deposit that was large enough, quickly enough, to get into the market.
" That's a big challenge, particularly for younger people," he said.
" People are putting off when they buy their house, they are even putting off when they have kids so they can save more."
"It's a very important issue [housing affordability] and that's why we will be dealing with it in the budget."
ABS statistics show that in the last 80 years, the number of women in Australia having children aged 15-19, 20-24 and 25-29 has declined, while the number of women becoming mothers who are in the 30-34 and 35-39 age brackets has risen.
However, this does not prove there is a link between rising house prices and people choosing to delay having children.
On high house prices, Mr Morrison said that "in Australia our prices may be high, particularly in Sydney and Melbourne, but they're real".
"The issue on housing affordability and prices in Australia is the mismatch between supply and demand."
A report on Monday suggested the government could also look to cap the size of negative ??gearing deductions and reduce the 50 per cent capital gains tax discount.
Labor has promised to reduce the CGT discount and to limit negative gearing to new properties only if elected.
Mr Morrison did not comment on the CGT issue, and is understood to be pushing for the concession to be reduced - a move that Prime Minister Malcolm Turnbull and Finance Minister Mathias Cormann have publicly opposed.
Australian fertility rates, by age group, 1935-2015 Photo: ABS
But on negative gearing, the Treasurer was blunt: "People who say you put up a tax and somehow you can buy a house anywhere you like, which is what the Labor Party is saying, that's a lie," he said.
" Labor is just saying get rid of negative gearing and all your problems are solved, that's just ridiculous. Last time Paul Keating did that [in the mid-1980s] rents in Sydney went through the roof. I don't see how increasing your rent helps housing affordability, particularly if you are renting."
