Opinion: 'This might be the time to make it a little bit fairer'

I am fortunate enough to be a homeowner and like most people I know, I have a mortgage to prove it. And yet my own reaction to the thundering news that house prices had declined across the country for the first time in two years was actually acceptance.

House prices were already slowing before the Reserve Bank of Australia started tinkering with the cash rate.

But now that it’s put its foot on the pedal and we’ve been served four interest rate rises in as many months, we know what is to come: as rates rise, house prices will go down.

We also know that Australian house prices have gone absolutely bananas over the past few years. It doesn’t matter where or how you cut it, this is fact.

What’s also true is that many people feel deeply uncomfortable about the inequality that has arisen when they see just how high and how fast prices have gone up.

And so one school of thought is that first-home buyers will no doubt be relieved by falling house prices. But not so fast, the sting is that with rising interest rates, these new buyers now can’t borrow as much money as they could a year ago.

At the risk of having an unpopular opinion, is that such a bad thing?

Australia’s deputy statistician, Teresa Dickinson told the Australian Financial Review recently: “Over the last 25 years the number of homes owned outright has increased by 10 per cent, while the number owned with a mortgage has doubled.” That’s right, doubled.

Household debt levels in Australia have made their way from the lower end of the spectrum to now being number five in the world according to the OECD.

Are we okay with that? I’m not. Are you?

One of the challenges when discussing property is that in most cases, there is a winner and a loser. House prices rise: good news for homeowners, bad news for young and price-sensitive buyers. House prices fall: bad news for owners, good news for first-time buyers and investors. Rents soar: good news for investors, bad news for renters. Property tax to be reformed: good news if you want price falls, bad news for owners and investors.

It’s a cycle that goes around and around.

To date, no government has had the gumption to suggest a profound way to tackle our housing crisis, nor the affordability issues that are crippling buyers and renters alike.

It’s not hard to see why. Many (loudly) lament soaring prices and the fact their children can’t move out of home, but no owner wants to see their own pile of bricks and mortar drop in value.

So what if this moment in time is the equivalent of the white knight? Could this lead to the property correction we have to have? What if we accepted that we all have to compromise a little: banks will lend less, people will pay less and as such, houses will cost less.

This might actually be the time, not to radically overhaul Australia’s property market, but to just make it a little bit fairer.

I for one am willing to take a hit.