As Prime Minister Tony Abbott staunchly defended Treasurer Joe Hockey over his comment that first home buyers needed to get a good job, the central bank added its “acute concern” about Sydney’s property market “bubble”.
Mr Abbott, Foreign Minister Julie Bishop and Social Services Minister Scott Morrison all backed Mr Hockey’s statements, describing them as “self-evident” and the criticism as “unfair”.
Mr Abbott said the Treasurer was “striving every day” for Australia, but stopped short of giving his full support.
“This is a Treasurer who is striving every day to do the right thing by the people of Australia,” he said, dismissing suggestions Mr Hockey’s simple advice on Tuesday for hopeful homeowners was a “gaffe”. He said he didn’t want to be drawn into commentary.
On Wednesday morning, Mr Hockey took a more conciliatory tone to the previous day.
“Yes it is difficult for first home buyers to get into the market, there’s no doubt about that, particularly in Sydney,” he told ABC Radio.
“So the best thing we can do as a government is help to create more jobs and better paying jobs.”
But his words on Wednesday contrast starkly with his dismissal of the issue of skyrocketing property prices on Tuesday.
“If housing were unaffordable in Sydney, no one would be buying it,” he said.
“The starting point for a first home buyer is to get a good job that pays good money.”
But a week after Treasury boss John Fraser said the Sydney housing market was unequivocally in a housing bubble, Reserve Bank boss Glenn Stevens said house prices in the NSW capital were “crazy”.
“Yes, I am concerned about Sydney. I think some of what’s happening is crazy,” he told a business lunch in Brisbane on Wednesday.
He said the steep rises in property prices in Australia’s biggest city were “acutely concerning” and that the issue was a social problem.
The Sydney market has grown by 12.2 per cent in 2014, according to the Australian Bureau of Statistics, and the Melbourne market grew 4.5 per cent.
HSBC research found Australian home prices have risen 24 per cent in the past three years, with Sydney jumping by 39 per cent.
Amid the throng of warnings about Sydney houses from a range of experts, Mr Fraser’s unexpectedly frank assessment was the one that labelled the hot market a bubble.
“When you look at the housing price bubble evidence, it’s unequivocally the case in Sydney. Unequivocally,” Mr Fraser told a Senate Estimates Committee hearing.
“Frankly, whatever the data says, just casual observation can tell you it’s the case.”
Commentary on the comments
Most of the government’s top brass was out in force on Wednesday to support the Treasurer after his comments had drawn fire from the Opposition, the Greens and social services peak bodies, which had labelled the comments “out of touch”.
Opposition Leader Bill Shorten said Mr Hockey’s comments were a “brain snap”.
“Every time Joe Hockey opens his mouth, we get an explanation of how out of touch the government is,” he told reporters in Hobart.
Mr Morrison said the commentary didn’t give the Treasurer a fair run.
“To confine it in the way the commentary on the comments has been done is unfair to the Treasurer’s real appreciation of the issues here and his real concern for the families trying to get into the housing market.”
“All of what Joe Hockey has just said (on Wednesday) in terms of how you can gain access to housing finance is true.”
– with agencies