Treasurer Jim Chalmers has defended government forecasts that house prices in Sydney and Melbourne could fall by more than $100,000, pushing back against criticism of cooling housing markets. Auction clearance rates have softened in those cities, though they rose nationally according to preliminary weekend data. Chalmers attributed the weakness to factors predating recent budget announcements.
The remarks come as the government faces scrutiny over housing affordability and its capital gains tax discount reforms. Chalmers rejected calls to replace what he called a "big distortion" from Howard-era 1999 policies with another distortion, arguing the revised CGT discount is applied "fairly and neutrally." The changes aim to address long-standing market imbalances affecting young buyers.
Preliminary data showed auction clearance rates rising in Brisbane and Adelaide even as Sydney and Melbourne saw declines. Chalmers noted the national aggregate figures improved, but acknowledged persistent weakness in Australia's two largest housing markets. The $100,000-plus fall forecast applies specifically to those cities under current projections.
The Coalition has criticized the government's housing policies, with some Liberals calling for a party "rebrand" amid internal division. Former anti-corruption commissioner Geoffrey Watson separately described calls to pause major infrastructure projects over corruption concerns as "silly." Market observers will watch upcoming clearance data for signs of stabilization.
The government maintains its CGT reforms will not worsen affordability, but critics argue the changes could further chill investment. The debate underscores tensions between cooling prices and long-term housing access.