How much home prices grew under each PM, from Albo to Howard

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Prime Minister Anthony Albanese’s stewardship of the economy has coincided with slower home price rises than most other modern prime ministers – but housing costs relative to wages remain the least affordable in 30 years.

A new study has revealed how much home prices have risen each year of the Albanese government’s tenure and how this compared with previous Liberal and Labor governments.

It revealed Albanese sat somewhere near the bottom among prime ministers of the last 50 years when it came to the pace of home price rises.

Prices have risen by an average rate of 3.5 per cent nationally each year he has been in power, according to the MCG Quantity Surveyors study, powered with SuburbTrends data.

The only modern prime ministers whose terms coincided with slower growth were Julia Gillard and Paul Keating, while Tony Abbott’s time in the top job saw similar average annual growth as Albanese.

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Albanese took office in 2022 with the promise of being a more sympathetic ear to the housing crisis due to his upbringing in public housing. Picture: Jason Edwards / NewsWire

Albanese-era home price rises were also about half the average rate of growth for a Labor prime minister.

Labor prime ministers have overseen an average 7.6 per cent annual rise in national home values since 1975, while the Liberal average was a similar 7.88 per cent.

The Prime Minister who oversaw the biggest rises in prices, measured by the average annual growth, was John Howard, followed by Bob Hawke, Malcolm Fraser and Scott Morrison.

It comes as a recent PropTrack study showed the more sluggish price growth under Albanese did not correspond with an improvement in housing affordability.

The cost of housing relative to wages dropped to a 30-year low in September – largely due to lacklustre incomes growth and 13 interest rate hikes between 2022 and 2023, the PropTrack study showed.

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Former Prime Minister Scott Morrison – in a picture posted to X with US President Donald Trump – oversaw the fastest rises in prices since Howard. Picture: X

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Experts explained that home price growth was a double edged sword when it came to the electorate.

Australian Prime Ministers have for decades had to walk a tightrope between meeting the demands of first-home buyers, who typically want more affordable prices, while also serving existing homeowners who normally want the value of their homes to increase.

“Who was a good prime minister for house prices depends on your perspective,” said MCG director Mike Mortlock.

“It’s worth remembering too that home prices can be influenced by government decisions but they are also a feature of the economy and global events. It’s not all because of who was in charge.”

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Construction delays at a time of elevated migration levels have meant housing demand has outweighed supply for much of Albanese’s time in office.

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Mr Mortlock also noted that national rises in home prices were heavily skewered by what was happening in Sydney and Melbourne, which together accounted for roughly 40 per cent of the country’s property sales.

This partly explained why the Albanese years have been characterised by slower national rises, even though cities like Brisbane, Perth and Adelaide have recorded record price rises.

The data from MCG Quantity Surveyors and SuburbTrends revealed stark differences in market moves during different governments:

PRIME MINISTER THAT SAW STEEPEST HOME PRICE RISES

John Howard’s time as prime minister saw by far the biggest rise in prices – both in aggregate terms and by the average annual rate of property price increases.

Prices rose by an average of 15.8 per cent per year during the 11 years Howard was in power, with prices growing 174 per cent over the full course of his prime ministership.

A median priced home in our capital cities was about $146,000 shorlty after Howard became PM in 1996. It was over $400,000 when he left office. Picture: Michael Jones

The median price of a capital city home was $146,000 shortly after Howard took office in 1996, and ballooned to over $400,000 by the time he handed the keys to The Lodge to Kevin Rudd in 2007.

A critical reason for the larger increases during the Howard years was the resources boom and the then government’s decision to half the capital gains tax on property investors.

The latter “reduced the effective tax burden on property investors, encouraging speculative behaviour and driving significant price growth,” the MCG-SuburbTrends report said.

“Simultaneously, the Liberal Party supported the continuation of negative gearing, allowing investors to deduct property losses from other taxable income.

“Together, these policies created an environment highly favourable to property investment … (they) also exacerbated housing affordability issues.”

FASTEST GROWTH IN A SINGLE YEAR

The data showed the largest single-year jump in average capital city prices occurred in 1989 under Prime Minister Bob Hawke.

National prices jumped about 20.9 per cent, attributed partly to buoyant late-1980s economic conditions and easier credit.

Key reforms, coupled with strong economic growth, saw home prices grow strongly in the 1980s.

The Hawke years saw the fastest annual price gains after Howard, with national prices rising an average 11.75 per cent. This was largely the result of economic reforms, including financial deregulation.

PRIME MINISTERS WITH SLOWEST RISES

Paul Keating oversaw the lowest average annual rate of home price growth at 2 per cent, with his tenure as Prime Minister coinciding with a prolonged national recession.

Growth under Julia Gillard was similar, attributed partly to the climate after the global financial crisis.