Shadow Treasurer Joe Hockey.

Shadow Treasurer Joe Hockey has some advice for property owners. Photo: Andrew Meares

Joe Hockey suggests house prices in Canberra could be pushed lower under a Coalition government.

"There is a golden rule for real estate in Canberra – you buy Liberal and you sell Labor," he said on Friday morning.

He did not specify that this result would be due to cuts to the public sector that are being promised by Opposition leader Tony Abbott if he wins the September election.

However, house prices in the territory dipped when John Howard made big cuts to the public service in his first term of government.

On the same television program, former prime minister Kevin Rudd responded to Mr Hockey's comment.

"Can I just say, Joe, I'm not sure that will go down well with all the voters in Canberra," Mr Rudd said.

Member for Fraser Andrew Leigh estimates $25,000 was cut from the price of the average Canberra house under the Howard government.

"That was in an era when house prices were much lower than they are today," he said.

Dr Leigh pointed out that Mr Hockey, the Opposition treasury spokesman said last year: "If you want to start with cuts we have said we will cut 12,000 public servants out of Canberra, that is the starting point."

Dr Leigh said the situation was similar to the case when the Howard government won office.

"Despite promising only modest cuts to public service job numbers before the election, the Howard government slashed tens of thousands of public service jobs in 1996 and 1997," he said.

''When the Liberals came to office in 1996, they wiped $25,000 off the price of a Canberra home.

''Today, Joe Hockey proudly jokes about how he'll do it the same again.

''Only yesterday, when the Prime Minister was discussing the new school funding that will go to the ACT, Mr Hockey was interjecting, 'what, like Gungahlin and Woden?'

''The Liberals' contempt for Canberra is shocking.''

However ACT Liberal Senate candidate Zed Seselja disputed the figures given by Dr Leigh.

He said that based on the moving annual for median house prices from the Real Estate Institute of Australia:

  • median house prices begin to drop from March 1994 under the Keating Government.  In the last two years of the Keating Government (between March 1994 and March 1996) median prices dropped by 4.4 per cent;
  • between March 1996 and June 1997 (lowest median price occurred under Howard), median prices had dropped by 3.1 per cent; and
  • from March 1996 to September 2007 median rose by 176 per cent.

‘‘Prices dropped more in last two years of the Keating Government than they did under Howard’s first 1.5 years, and to its lowest point,’’ Mr Seselja said.