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Supply-side solution 'the only way to keep house prices down'

House price inflation in Australia will continue to soar unless more homes are built, treasurer Scott Morrison has said.

Mr Morrison made his comments while speaking to Sydney radio station 2GB about a package of measures being taken by the Labor-run state government in Victoria, which include cutting stamp duty, extra taxes on properties bought speculatively and left empty while buyers seek to "flip" them, and the "really interesting" shared ownership idea, which involves the buyers purchasing 75 per cent of the property and the government having a 25 per cent stake.

Reflecting on these moves, he said: "Good on them for having a good crack at this", but said these were not enough when not enough homes are being constructed. 

Discussing the likely effects of the stamp duty cut, Mr Morrison said this was likely to raise prices rather than lowering them.

He explained: "At the end of the day, if that just means people bid up more in the auction because they can borrow more because they don't have to pay stamp duty, well obviously, that will just take prices in one direction.

"So you can't do that without addressing the supply issues at the end of the day."

Prime minister Malcolm Turnbull backed up this point, saying the Liberal-National government is "absolutely focused" on the issue. He added that to deal effectively with the matter, "we need federal, state and local government to work together."

Mr Morrison also said he wanted to see the shared ownership idea get more backing from the private sector, with it stumping up the 25 per cent instead of the government. 

These matters may all be the focus of a promised package of federal-level housing measures that Mr Turnbull has said will feature in May's Budget statement. 

Government ministers have come under increasing pressure from opponents in parliament over Australia's strained housing market. Among those derided as being out of touch on the issue are deputy prime minister Barnaby Joyce, who was criticised for saying those seeking homes in Sydney should look to buy in Tamworth, despite the area having the highest unemployment of any Sydney suburb. 

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