Several years ago, as The Great Australian Housing Bubble raged, Liberal MP John Alexander was one of the only people on his side of politics speaking the truth on housing.
In March 2016, Alexander famously declared the Australian housing market a “Ponzi scheme”.
Alexander followed this up in May 2016, claiming that negative gearing had created a “market that is dominated by speculative investors” and that “first homebuyers have really been unable to compete”.
In October 2016, Alexander claimed that would-be owner-occupiers competing against negative-gearers were like ordinary tennis players coming up against Roger Federer… “that’s what it’s like for the homebuyer against the investor – it’s stacked against them”.
In January 2017, Alexander urged the Turnbull Government to consider winding-back negative gearing as part of the upcoming May Budget.
In March 2017, Alexander said he had “grave concern the bubble is out of control” and described housing affordability as “the biggest domestic issue in Australian politics”. He also said Australians should have “the right to have the opportunity to own your own house if you are working”.
Then in February 2019, with the federal election pending, John Alexander flipped the script and attacked Labor’s negative gearing policy, claiming “it is now diametrically the wrong time to be doing this”, that it “shows a total lack of understanding of the market”, and that negative gearing “is a very serious issue in my electorate” as property “is the biggest asset many people will own”.
But then with the election passed, Alexander again called for negative gearing to be capped in March 2020, claiming “politicians have unforgivably played politics with housing for too long”.
Now John Alexander has proven once again that he is a housing affordability phoney, pushing to allow home buyers to buy property within their retirement funds so as to prevent property values from falling:
Federal Liberal MP John Alexander warns the Australian housing market could face the worst price crash in 130 years without radical interventions, like allowing buyers to own homes within their superannuation and using retirement funds to offset mortgage repayments…
Mr Alexander wants to give all super fund members the ability to use their retirement nest egg to buy a home, which would be a substantial shift in the existing rules…
Further allowing superannuation balances to be used as an offset account would allow home buyers to more easily afford a home, Mr Alexander said, as retirement funds would be used to reduce the interest paid on an outstanding mortgage…
“We are facing the biggest correction in the housing market we have seen since the 1890s,” Mr Alexander said. In the decade following a major property boom in the 1880s, house prices in some areas fell more than 50 per cent…
A spokesman for the ABA confirmed Ms Bligh had spoken with the Mr Alexander but declined to comment further.
Earth to John: the only way for housing to become ‘affordable’ is for prices to fall.
House and land prices are determined through supply and demand. And if you increase the supply of money for housing by flooding the market with funds drawn from super, all it will do is drive up house prices further rather than make housing more affordable.
The last thing Australia needs is to concentrate more of the nation’s financial resources into its grossly distorting property bubble.
