The housing 'super cycle' may be ending, and that could be a good thing

The construction and real estate sectors account for more than 10 per cent of Australian economic output. (ABC News)

Australians have been held hostage to the housing market for the better part of this century.

The cost of buying a typical home has jumped from about four times the typical annual income across most capital cities in the year 2000 to more than eight now.

Things are even worse in the most expensive city, Sydney, which was even less affordable to start with and where a median home will now set you back at least 10 times the typical annual income.

No wonder then that home ownership rates for under-35s have dropped by 7 percentage points since 2001.

Already, it takes prospective buyers in most capitals more than a decade to save for a 20 per cent deposit if they're on a fairly average income.

The federal government's recently expanded 5 per cent deposit scheme has lowered this hurdle for some, but many can't afford the repayments on a 95 per cent loan anyway.

So family help is essential for a large and growing cohort of first home buyers, meaning if you don't have parental wealth you're effectively locked out.

Even for those who can break in, a 30-year mortgage is now the norm, and, if you're not buying until your late 30s or 40s, then that means you're in debt until retirement and potentially beyond.

It's not just individuals who've become trapped. Australia's big banks have around two-thirds of their assets tied up in residential property.

On some estimates, the construction and real estate sectors account for more than 10 per cent of Australian economic output and around 1.5 million jobs.

That's why we titled the series I did with News Daily last year Housing Hostages, because the whole nation has become prisoner to the property market.

As with most hostage situations, breaking free will not be painless and without risk, as the Albanese government is quickly learning.

While the government has framed its tax changes as modest tweaks to help even the playing field between owner-occupiers and investors, make no mistake that these are significant changes.

If they weren't, the property sector would not be screaming blue murder.

After many years of lamenting worsening affordability, there is something approaching panic that national home prices flatlined in May.

No matter that they were still up 8.8 per cent over the past 12 months.

AMP chief economist Shane Oliver has one of the higher predictions for home price falls, and even he believes that will be about 5 per cent in total, spread over this year and next.

"The 30-year supe