Dr. Tom McDonnell:

Income tax will be a contributory factor pushing in the other direction but it does not mean it will be sufficient to overwhelm all the other effects that are going on. There is no doubt that real incomes will decline. It depends on Government responses but it looks likely that real incomes will decline. It is unclear how much of an effect that will have on the cohorts that are in the housing market, unfortunately for them. Interest rates will have an impact. That will withdraw potential buyers from the market, thereby reducing demand and temporarily bringing house prices to a lower level of growth but fundamentally, those issues in the housing market will remain. It is a structural market failure that will take many years to resolve, unfortunately.