Canberra will have hell to pay on housing

A likely fall in the dollar, drop in consumer confidence and hike in interest rates will see Australia's current housing recovery stall, leaving the next government stranded.

Next year is shaping up as an annus horribilus for whoever wins the federal election, but one of the big nasties likely to turn voters against whoever’s in the Lodge is being overlooked – house prices, and the wealth effect that flows from living inside an appreciating asset.

Prices are leaping ahead again, causing much excitement. However to understand what could, and in my view is likely, to go wrong, requires a bit of history.

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