Home Affordability

In SMH's daily "Decision 2010" columns there is an article on home affordability.
It makes the point how Kevin Rudd's doubling of the first home owner grant boosted house prices, with the average loan during Rudd's truncated time in office rising from $230,000 to $290,000. The problem with this, of course, is that now the grant boost has been removed, those house prices must slip back, leaving new home buyers stressed by increasing interest rates and facing negative equity.
No matter, Tanya Plibersek says, the grant kept builders in work. But if that was the only objective, the grant should have been restricted to new construction, and not used just to boost the prices of existing homes.
The report makes the point that "about 70% of Australia's 9 million or so dwellings are owner occupied, so increased housing affordability is not really the priority of the majority". Indeed most home owners would be very upset by any plan which proposed very swiftly to reduce house prices, if it involved them getting less money when they sell their homes. 70% of voters would say "by all means cut sales and land taxes, but don't threaten the sale value of my asset!"