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The government this week clarified details of its housing tax policy changes announced on March 23, and they were slightly less bad than expected.

My own experience of two first home buyers 13 years apart shows that servicing hasn’t changed all that much. It's as hard today as it was 13 years ago. But what it doesn’t show is the sizeable part of our population that are locked out of the housing market altogether.

Nationwide average house sale prices rose by 2% in August. This followed a 2.4% rise in July, 1% gain in June, 0.8% rise in May and just a 0.5% rise in April.

Now that we are experiencing lockdown again, can we expect the same things to happen in the residential real estate market and economy as last time? No. There are some key differences between this situation and that of March 2020.

We're starting to see commentators and even the Reserve Bank talk about falling house prices towards the end of next year. We shouldn't be surprised that none of these predictions are from real estate companies who bring the figurative cocaine to the house party. Here's my perspective on house prices from the frontline.

There are a growing number of factors in play which suggest that while demand for housing will remain firm, we've entered the end game for the period of strong house price rises well exceeding the rate of growth in household incomes.

Whenever things like the global pandemic, the 2008-09 Global Financial Crisis, or tax policy alterations happen such as those announced on March 23, most of us can take a view on what the likely impact will be. Sometimes these views can be horribly wrong.

Two weeks ago, I wrote on the theme that young buyers will probably hold back from the residential real estate market until they see older investors returning – then they too will return. Evidence for this has already been shown from my surveys.

There is a Catch-22 situation that first home buyers sometimes find themselves in. They want to buy, but they are nervous, and if they see others stepping back, they do too even though the explicit aim of the government is to give them more space to buy.

We are now over five weeks down the track from the housing policy announcements of March 23. We still lack some certainty about things and perhaps that uncertainty helps explain some of the things we are seeing in the residential real estate market.

On March 23 the government surprised everyone with some draconian changes in the ability of property investors to deduct interest expenses when calculating their tax obligations. Will we really see big changes which could stop house prices rising for an extended period as the government would like? No.

This post will start with a little rant and then progress into trying to understand the downstream impacts of a big week for the housing market. Just in case you were under a rock this week, the government announced a major change in housing tax policy.