‘It’s hard to pay a mortgage even as a minister’: Abbott

A day after Treasurer Joe Hockey said Sydney housing is affordable and advised potential first home buyers to get “a good job that pays good money”, the prime minister admitted even senior MPs find it tough.

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And Reserve Bank governor Glenn Stevens on Wednesday said parts of Sydney’s housing market are “crazy” and “acutely concerning”.

Mr Stevens’ comments came as HSBC research found Australian home prices have risen 24 per cent in the past three years, with Sydney jumping by 39 per cent.

“Yes, I am concerned about Sydney. I think some of what’s happening is crazy,” he told a business lunch on Wednesday.

But, while reflecting it was hard to get into the housing market, especially in his home city of Sydney, the prime minister defended his treasurer on Wednesday.

“Even as a cabinet minister sometimes it’s hard to pay a Sydney mortgage, and I know over the years I’ve earnt a lot more than the average person,” Mr Abbott told reporters in western Sydney, noting his home was still being paid off.

Cabinet ministers are paid about $340,000 a year, while the prime ministerial pay packet is more than $500,000 annually. 

Mr Abbott disagreed with suggestions Mr Hockey had made another gaffe in his advice to first home buyers.

Mr Hockey’s “outstandingly” good budget had been the best possible thing he could have done for home buyers because it had lifted confidence, the prime minister told reporters in western Sydney on Wednesday.

Families under housing stress: Morrison

Social Services Minister Scott Morrison, who also hails from Sydney, said financial stress was a serious issue.

While renters were paying on average about 25 per cent of their disposable income on accommodation, those paying mortgages were forking out about 31.5 per cent, he said.

“Once you get above 30 per cent, there is a bit of stress related to that.”

Defending himself on Wednesday, Mr Hockey said he understood the depth of feeling over his comment.

“Let’s not play the man, let’s actually deal with the policy,” the treasurer told ABC radio.

“That’s why we are working so hard … to build the jobs, to build the opportunities for people to get ahead.”

Mr Hockey said he “totally understood” that for a lot of Australians housing was very expensive.

‘Brain snap’

Opposition Leader Bill Shorten labelled Mr Hockey’s comments 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 Shorten said part of the problem lay with improving the supply of land and the availability of new housing construction.

Discussion was also needed on the demand side, he said.

Parliamentary secretary to the treasurer Kelly O’Dwyer says the nation is under-supplied by about 200,000 homes a year.

Labor’s finance spokesman Tony Burke said the treasurer was having “crazy rants” day after day without any factual basis.

He also said there were many policy levers that could help improve affordability because housing prices were influenced by demand as well as supply.

The opposition is open to including changes to negative gearing in any discussion.

“We’ve ruled out anything that would be retrospective and flatly ruled out anything that would have a negative impact on supply,” Mr Burke said.

Liberal MP backs Hockey’s housing advice

Liberal MP Craig Laundy has come out to back the treasurer over his widely criticised advice to first home buyers.

“He was saying that if you have a job and that job is secure and that job is well paid, a bank will lend you money and interest rates are as low historically as they have been,” Mr Laundy, whose electorate covers parts of western Sydney, told ABC radio on Wednesday.

Mr Laundy later said Mr Hockey’s job was not on the line after his comments.

“Pulling a sentence out of a paragraph I don’t think, in this 24-hour, this gotcha media cycle, is fair,” he told ABC radio.

The backbench MP claimed the federal government was being asked to provide a “silver bullet” to fix housing affordability, but there isn’t one.

Parliamentary secretary to the treasurer Kelly O’Dwyer says the nation is under-supplied by about 200,000 homes a year.

“We know that this is a very real issue for so many families … but the states need to get on board, release more land so more people can afford to own their own home,” she said.

 

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