Last month's fall in house prices is good news. Further falls would be welcome.
Politicians and media headlines avoid saying this, but it is what most Australians think.
A recent opinion poll by Resolve Political Monitor found 54 per cent of Australians supported lower home prices, about five times as many as the 11 per cent who were opposed (35 per cent were unsure or neutral). This includes overwhelming support among home owners, 53 per cent of whom want lower prices, compared with only 12 per cent opposed.
A Sky News Pulse/YouGov poll showed similar results. Forty-nine per cent of Australians want property prices to decrease over the next two years, compared to just 17 per cent wanting an increase.
These results surprise those who think Australians are narrowly selfish, supporting only those policies that help their individual finances.
On the contrary, voters (including home owners) care about their kids. They want younger generations to have the same opportunities to buy a house and settle down as their parents and grandparents had.
Moreover, Australians care about fairness. They see the high cost of housing dividing society, widening the rift between the housing haves and the housing have-nots.
Our housing market is broken and voters know that.
The media often get this wrong. Headlines claimed "unwelcome news for two-thirds of Australians".
Politicians don't understand the public mood either. When government representatives are asked whether they want housing prices to fall, they sidestep the question or answer "no, we want sustainable growth".
Not only is this out of step with public opinion, it doesn't make sense. How can the government say that housing is too expensive, yet not want lower prices?
The opposition is worse. Michaelia Cash complained that a 0.4 per cent fall in housing prices is a "crash ... that's sadly not something to celebrate".
In Parliament, Angus Taylor called for a guarantee that prices would not fall any further - apparently under the misapprehension that the government sets housing prices.
There is a legitimate concern with home owners going into negative equity causing financial instability. The Global Financial Crisis was triggered by large falls in housing prices in the United States and other countries, causing loans to go bad and banks to go bust.
However, the financial industry and its regulators have learnt from that experience and taken aggressive measures to prevent a recurrence.
The Australian Prudential Regulation Authority says our banks are now "unquestionably strong". In any case, the recent blip is trivial relative to the falls seen before the GFC.
Whether the latest falls in house prices are attributed to interest rates (as the research says) or to tax changes (which research says is unlikely), we should be able to agree they are a good thing.
The ending of a drought should not prompt panic about floods. Take the win.
Last week's fretting about housing prices will be useful if it leads to a discussion about where we want prices to go and how we might achieve that.
These are the real questions that we, as a nation, need to discuss.
Several benchmarks for affordability are possible, including costs, prices in other countries, or prices from earlier times.
They all suggest huge falls in prices are needed; maybe 30, 40, or 50 times the recent fall. The precise estimate doesn't matter; it's clear that there is a huge task ahead.
A series of recent reports from the government and think tanks agree on the way to get there: We need to loosen zoning restrictions to allow more building.
That conclusion is supported by a ton of research and experience from around the world.
Zoning reform is primarily a responsibility of state and territory governments.
The ACT, NSW and Victorian governments have been leading the country.
The ACT's Missing Middle Housing July 1 reforms allow townhouses and low-rise apartments in established suburbs.
NSW and Victoria have been over-riding obstructionist councils to allow higher density, especially near transport centres in inner suburbs.
Reforms like these are exactly what experts say is needed. But those efforts are not yet reflected in building construction data, which remains frustratingly weak.
This should not be a worry. Substantial planning reforms overseas, such as Auckland, Sao Paulo, Zurich, Austin, New York, Tokyo, Lower Hutt, Edmonton and Seattle (all of which have been studied closely) have led to large increases in construction, but with lags of several years.
Given that many of the reforms in the ACT, NSW and Victoria have only recently been implemented, we should not expect a large boost in building until 2027.
The federal government's role in boosting housing supply is limited to encouragement, assistance and education.
The $2 billion Local Infrastructure Fund announced in the budget is expected to unlock 65,000 new homes.
More important is the planned $10 billion for 100,000 Homes for first home buyers, but full details of this are yet to be announced.
These policies to boost housing supply will improve affordability but they are not enough to solve the crisis.
Good estimates are hard to come by (in itself, a policy flaw). But the government's own guesses are that measures like those above might deliver a few hundred thousand new homes over the next decade.
That might stop prices rising, but it won't solve the affordability crisis in our lifetime.
Overall, housing affordability is one of Australia's top social problems.
Recent falls in housing prices represent a miniscule step in the right direction, which should be welcomed.
But more effort from state, territory and federal governments is needed.
