Surprise survey findings show the rock and the hard house the treasurer is stuck between

Most Australians think falling house prices are good for the country, shock results from a Westpac survey show.

While 68 per cent of the 1165 surveyed Australians were happy with the falls happening across the country, the same number (67 per cent) would also be worried if they actually did fall further. 

It shows the “damned if you do, damned if you don’t” dilemma the federal government is facing. 

Despite the support for falling prices, Labor has been lashed by voters since Treasurer Jim Chalmers handed down his fifth budget in May, which pushed down property values. 

Voter support has fallen to the record lows of the Gillard government. 

Four interest rates in 2026 and economic uncertainty stemming from the Middle East conflict have also contributed to the property downturn, with prices dropping 4.7 per cent across the capital cities over the September quarter. 

Westpac executive Carolyn McCann said the big bank’s survey findings highlight the complexity of the housing debate.

"Affordability remains a significant challenge for many Australians, and these findings suggest many view lower prices as part of the solution,” McCann said. 

“But there is another side to that equation. For many Australians, their home can be their biggest financial asset, so concern about falling values is understandable.” 

The survey also found 82 per cent of Australians thought home ownership was ‘completely out of reach’ for the average Aussie. 

Westpac’s survey complements the Commonwealth Bank’s more bullish belief that housing needs to be more affordable. 

That belief does not necessarily just come from a sense of justice for a generation locked out of the market; lenders lose out on loan fees if everyday Australians cannot afford to take out a mortgage. 

The Reserve Bank of Australia is all-but-locked in to raise interest rates for the fifth time in 2026, taking the cash rate to 4.85 per cent, as it attempts to tame inflation. 

Figures from the ABS this week showed inflation had increased more than expected. 

Westpac warned mortgage holders more interest rate pain is likely looming. 

“With the December core inflation likely to remain strong, a follow-up hike cannot be ruled out,” Westpac’s head of business economics Sian Fenner said. 

Liberal MP Andrew Wallace said that high government spending was to blame.

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“Anthony Albanese having a crack at the RBA is like an arsonist complaining about getting his fingers burnt,” Wallace told Nine’s Weekend Today. 

“It's because this government has a spending problem.

“This will be the 17th interest rate rise under this government.”

Prime Minister Anthony Albanese attempted to distance himself from the probable rate hike on Melbourne Cup Day, telling the Sydney Morning Herald and The Age interest rate a “blunt instrument”, words he has never used before.