News and politics live updates: Labor urges calm as auction clearance rates fall amid housing tax reforms

Shadow Housing Minister Andrew Bragg has cast doubt on claims Australia’s housing market is undergoing a correction, arguing affordability pressures will remain until significantly more homes are built.

Responding to comments from Housing Minister Clare O’Neil, who pointed to falling auction clearance rates as evidence of a market correction, Mr Bragg said entry-level housing remained stubbornly expensive.

“It’s a long game housing and I’m not sure that she’s a forecaster,” Mr Bragg says.

“Ultimately, until we see a larger amount of housing supplied, I don’t think we’re going to see price stability or affordability.”

Housing Minister Clare O’Neil has described the recent slowdown in the property market as a “correction”, as auction clearance rates slump to levels not seen since the early days of the COVID-19 pandemic.

Asked whether Australians would notice improved housing affordability before the next election, Ms O’Neil stopped short of making any guarantees, arguing the market was being influenced by a range of factors beyond Labor’s changes to negative gearing and capital gains tax.

“We’ve just been through what has been extremely high house price growth in the period from COVID, basically before COVID to today. House prices have gone up just in that time by more than 50 per cent and we are seeing a correction on that,” Ms O’Neil says.

Opposition Senate Leader Michaelia Cash said the deal exposed a major credibility problem for the Prime Minister, accusing him of abandoning repeated commitments not to alter negative gearing and capital gains tax arrangements.

“What is hypocritical is the government doing a dirty deal with the Australian Greens to ram their toxic tax changes through the Australian Senate tomorrow,” Senator Cash said.

“Mr Albanese has a massive credibility problem. Australians now know he lied to them.”

The Coalition has vowed to oppose the tax changes and campaign against them at the next election, while still supporting Labor’s tax cuts. Senator Cash claimed the reforms would hurt Australians seeking to build wealth and get ahead, warning: “Say goodbye to aspiration and hard work in Australia, because Albanese is about to kill it.”

A deal with the Greens has cleared the way for Labor’s controversial tax reforms - and sparked a political firestorm.

The compromise, which includes extending scrutiny of the Government’s proposed NDIS reforms, is expected to allow the legislation to pass the Senate this week.

Housing Minister Clare O’Neil hailed the agreement as a breakthrough that would deliver tax cuts to 13 million workers, help renters enter the housing market and create a fairer tax system, while the Opposition accused Anthony Albanese of breaking promises made before the election.

“This is the biggest reform to housing and taxation our country has seen for a generation,” Ms O’Neil told Sunrise.

“The bill that the Parliament will now pass is going to give a tax cut to every single one of Australia’s 13 million workers. It’s going to create a fairer housing system, bringing 75,000 rental households into home ownership.”

But Opposition Senate Leader Michaelia Cash said the deal exposed a major credibility problem for the Prime Minister, accusing him of abandoning repeated commitments not to alter negative gearing and capital gains tax arrangements.

“What is hypocritical is the government doing a dirty deal with the Australian Greens to ram their toxic tax changes through the Australian Senate tomorrow,” Senator Cash said.

“Mr Albanese has a massive credibility problem. Australians now know he lied to them.”

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Labor frontbencher Tanya Plibersek has urged Australians to “take a deep breath” amid concerns about falling auction clearance rates and warnings of a potential property market slowdown following the Government’s housing tax reforms.

Ms Plibersek said Treasury forecasts still showed house prices rising, albeit at a slower pace, arguing that would help more Australians break into the market.

“I think people need to take a deep breath on all of this. Our treasury estimates are that house prices will continue to grow. They’ll grow more slowly. That gives people the chance of home ownership,” she told ABC News Breakfast.

She said lower clearance rates reflected broader economic uncertainty and interest rate pressures, while first-home buyers were increasingly competing for properties.

“There’s still a lot of buying going on, but it’s first home buyers who are actually having a shot at the market competing with other first home buyers.”