The Greens pledge their support in exchange for an end to an exemption that allows self-managed super funds to borrow money to invest in residential property, and a delay on the overhaul of the NDIS.<\/p>\n
There are doomsday predictions that the housing market is on the brink of collapse and that our major banks, which rely overwhelmingly on selling home loans, will suffer.<\/p>\n
What is becoming increasingly lost in all the noise is that Australia’s housing market had already been teetering into the twilight zone, boosted for three decades by a cocktail of tax breaks, ever-declining interest rates and population growth that guaranteed demand always outstripped supply.<\/p>\n
Affordability was close to topping out and, unless you were born into a property-owning family, your chances of ever owning real estate were rapidly diminishing.<\/p>\n
If ever there was a case for tax reform, it was around property.<\/p>\n
Property boom, productivity bust<\/p>\n
There’s another P word raising alarm, not just among economists and the business world, but in the political realm.<\/p>\n
Treasurer Jim Chalmers even had a roundtable summit last year to try to formulate a plan on how to fix it.<\/p>\n
It’s productivity, or rather, the lack thereof.<\/p>\n
It’s a problem across the developed world, but we are headed for the Olympic wooden spoon if we maintain our recent lacklustre performance.<\/p>\n
As this graph by the Reserve Bank illustrates, our productivity \u2014 the blue patch \u2014 has been in steady decline for 30 years and has now almost evaporated.<\/p>\n
If it wasn’t for population growth, our economy would be in reverse.<\/p>\n
![\"A](\"https:\/\/www.newsbeep.com\/au\/wp-content\/uploads\/2026\/07\/8f7fe0f78c2f2a022de3386ec1a7d879.png\")
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Productivity, in blue, has been in steady decline for 30 years and has now almost evaporated. (Supplied: RBA)<\/p>\n
Our appalling performance in the productivity stakes is holding back our living standards, your pay cheque, national economic growth, and is firing up our inflation problem.<\/p>\n
So something needs to be done. But what?<\/p>\n
Given it is difficult to measure, as it’s impacted by a multitude of factors, takes years to identify as a trend, and is little understood even by those who specialise in studying it, finding a solution is no easy task.<\/p>\n
Our business leaders point to too much regulation and red tape. They’d also like tax reform which, in their world, is code for paying less tax.<\/p>\n
What most people agree upon though is that investment in new machinery, technology and ideas is fundamental to improving productivity.<\/p>\n
And that’s where productivity collides with property.<\/p>\n
Back where the graph above began, in the 1980s, our banks were falling over each other to hand money out to businesses that were trying to break out of Down Under and go big across the globe.<\/p>\n
That all came to a shuddering halt after the 1987 stock market crash.<\/p>\n
Peering out from the ashes, they looked around and rediscovered home lending.<\/p>\n
OK, it wasn’t as flash as hanging out with high-flying entrepreneurs. But, boy, was it profitable.<\/p>\n
What a fall in house prices would mean<\/a><\/p>\n After decades of growth, Australian house prices are slowing. Here’s what a fall could look like.<\/p>\n Homeowners, they realised, would do almost anything to avoid default.<\/p>\n And as interest rates began easing in the 1990s and real estate prices gathered pace, the banks discovered a perpetual motion money machine that would have made Charles Ponzi proud.<\/p>\n The more you lent, the more prices rose. The more prices rose, the more you lent and the bigger your profits. It was a great time to be a banker.<\/p>\n Then came the Howard era’s halving of Keating’s capital gains tax and the sails were set for the new millennium property boom.<\/p>\n Why we pay twice<\/p>\n Our obsession with real estate has pushed Australian households into an ever-increasing debt spiral.<\/p>\n Australian productivity performance might lag the rest of the globe, but when it comes to household debt we’re right up there with the best.<\/p>\n Australians now owe their banks more than $2.5 trillion on mortgages<\/a> secured against their homes and investment properties.<\/p>\n Australia’s property debt is more than four times the size of the economy. (Supplied: MacroBusiness)<\/p>\n The property mania has driven the value of our housing to an eye-watering $12.77 trillion<\/a>.<\/p>\n That’s more than four times the size of the economy, far higher than in America where the housing stock is worth about double the size of its economy.<\/p>\n But that property addiction has come at a cost, not just to households in the form of higher debts, but to the economy as a whole.<\/p>\n The concentration on housing has meant our banks have less available funds for business investment, a key driver of productivity.<\/p>\n![\"A](\"https:\/\/www.newsbeep.com\/au\/wp-content\/uploads\/2026\/07\/035f37dca66f92e3d905768ed362fb30.png\")
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