House prices in Sydney and Melbourne are down by 3.1% and 3.5% respectively, from their most recent peaks, according to the latest data from Cotality. Across Australia as a whole, house prices didn’t rise last month, the first time that has happened since January 2023. And the annual rate of house price inflation dropped to 9.5% from a most recent peak of 10.9% over the year to February.

If these reports were about any of the other 86 classes of goods and services into which Australia’s consumer price index is divided, they would be greeted with universal approbation, and the government would be claiming credit for “easing cost-of-living pressures”.

But because they are about the price of housing, the reaction of most politicians, much of the media and a good deal of the general public has been very different – ranging from “the sky is falling in” and “the government ought to do something to stop house prices from falling” to “it’s not our fault”.

And this tells us something profoundly important about why housing affordability has deteriorated so much – and why home ownership rates among people aged under 45 have fallen so far – over the past three decades.

In the decades after the second world war, Australians and their political representatives saw housing primarily as something that met basic human needs for shelter, security and a stake in the communities in........

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