QUESTIONS WITHOUT NOTICE: TAKE NOTE OF ANSWERS

Senator DOWLING (Tasmania) (15:05): We hear a lot being thrown around right now. It's really not helpful to use emotive language like 'mortgage prison' and 'trapped'. There's nothing unusual in many buyers finding themselves in a temporary period of so-called negative equity.

That means at a particular point in time you owe more than the notional value of the house under your mortgage. That's always been less than two per cent in Australia. It was much higher under the previous government.

Current figures are around one per cent, and the RBA and many real estate analysts have pointed out that this is not an issue for long-term investors. Most people who buy a house are doing it for the long term, and what matters is the valuation five, 10 or 20 years down the track. A temporary period of negative equity is a silent issue, according to the Reserve Bank of Australia.

It is not one that we should seek to make political hay out of. It is something that is not unusual. For decades the Australian property market has had cyclical features about it, so there will always be periods where house prices do not go up in a straight line.

House prices have a period of moderation. Particularly over the rapid growth in the post-COVID period of low interest rates, we saw a huge spike in house prices. Therefore, it's only understandable that at some point there would be a cyclical correction and we would start to see house prices moderate.

That means, if you bought a house at a particular time, you may find in the immediate period afterwards that the price goes back somewhat. It doesn't actually have a direct economic consequence unless you're in a position to sell—unless you are forced to sell. One of the great things that we've achieved in recent times is record generational low unemployment in Australia, very much in the low 4½ per cent range, which is almost considered full employment.

When you have those levels of strong employment, you don't have the levels of mortgage stress and forced selling. That is one of the really important things to underpin: the very responsible approach that Australian households and mortgage holders take. They are in very strong balance sheet positions to be able to service their mortgages.

Whether households are able to continue to service their mortgages—that is what really matters, not a notional valuation compared to the loan book. I think it's helpful to get some facts on the table around that, and there's a reason why we're acting on housing in the first place. I cannot see how anybody could say the status quo was acceptable.

We've seen house prices grow by 400 per cent since 1999—400 per cent. Wages have probably grown by around half of that amount. It's made homeownership totally out of reach for a whole range of middle-range professions that used to aspire to homeownership and now no longer have that opportunity.

We are trying to correct that and give ordinary working people an opportunity to get into their own home. That is not just an equity issue or an intergenerational equity issue; it's also a productivity issue. Workers need to be able to find housing where employment is, and we want to be able to have affordable housing so people can tap in to the employment opportunities that are out there.

One of the most important ways, as was outlined in question time, is increasing supply. Supply is the main game here. Yes, there are some tax measures, but supply is what this is all about in this debate and will continue to drive more housing.