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Tony Abbott Tells Parliament He's Glad Houses Prices Are Rising

"As someone who, along with the bank, owns a house in Sydney, I do hope our housing prices are increasing."

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In the face of a warning from Treasury that capital cities are facing a housing bubble, the prime minister has told parliament that he is happy that house prices are rising.

"As someone who, along with the bank, owns a house in Sydney, I do hope our housing prices are increasing. I want housing to be affordable but nevertheless, I also want house prices to be modestly increasing," the prime minister said during Question Time.

His comments come just hours after the head of Treasury told Senate Estimates that he was concerned that young people in Sydney and Melbourne were being priced out of the property market due to low interest rates and rising house prices.

Peter Parks / Getty Images

"House prices are high and it is and certainly in Sydney having a palpable impact on young people trying to get into the housing market, and I think that's highly, highly unfortunate," Treasury chief John Fraser said.

"It does worry me that the very, very low, historically low levels of interest rates are encouraging people to perhaps over-invest in housing."

The prime minister's remarks were slammed by Labor and the Greens, labelling him "clueless and "out of touch".

Prime Minister demonstrating his complete lack of interest in housing affordability, save for his own house price. Extraordinary #qt


Abbott completely clueless on the economy, embarrassing #qt

So many locked out of the housing market and Abbott's response is to hope for an increase in prices. How out of touch can you get.

people stuck on emergency social housing waiting lists for years will be delighted your investment is performing so well, tone #qt

Tony Abbott co-owns his family home in Forestville, on Sydney's northern beaches.

Torsten Blackwood / Getty Images

Housing prices in Australia's capital cities slipped in May, the first time since November last year.

But overall they are still on the way up. In Sydney, house prices have risen by 15% over the past 12 months and in Melbourne house prices have risen by 9%.