Home owners in Sydney’s middle-ring suburbs have taken the brunt of the city’s property downturn, with voters in key marginal seats among those hardest hit by falling property prices, new data shows.
One in every five federal electorates across NSW recorded double-digit house price falls last year, data from Domain has revealed, with the Liberal seat of Bennelong experiencing the biggest drop — its median fell 16.3 per cent year on year.
Electorates with a median house price between $1 million and $1.5 million saw the biggest declines, said Domain economist Trent Wiltshire, with nine of the 15 most affected electorates — including the marginal Sydney seats of Reid and Banks — held by the Liberal Party.
“These are the more expensive areas, but not the most expensive,” Mr Wiltshire said, adding Liberal seats tended to have higher rates of home ownership due to generally higher income levels and an older demographic.
Meanwhile Labor electorates were home to more renters and harder hit by apartment prices falls.
The biggest unit price drops were in the city’s west, north west and south west, with the seat of Fowler — which covers the Liverpool region — faring worst with an 11.5 per cent annual fall.
The marginal Labor seats of Lindsay, in the city’s west, and Macquarie, covering the Blue Mountains, as well as the Liberal seat of Banks, were also among the top 10 electorates for unit price falls.
The election and potential changes to negative gearing and the capital gains tax discount, if Labor wins, are front of mind for buyers there, according to Dean Jr Boskovic of BOS Realty.
“A lot of people [in the Liverpool region] are asking what it means, how will it affect me and how will it affect the market,” said Mr Boskovic. “It’s definitely a big question on buyers’ minds and rightfully so.”
While first-home buyers in the area were keen to see negative gearing scrapped, Mr Boskovic said, investors and home owners wanted to see it remain.
He said concern about falling property prices was so strong among residents that he expected to see a swing away from Labor, particularly as the NSW election had already seen a swing to the Liberal Party.
“Our market is not great at the moment, the selling market is not energised and you’re throwing another thing on it … just another concern [vendors] have,” Ms Murphy said.
She added home owners were concerned about whether they should be aiming to sell before the election, while investors — who now make up a very small portion of her buying pool — were watching keenly to see what happens with negative gearing.
Mr Wiltshire said electorates with a greater proportion of renters were likely to be more welcoming of potential housing-related tax changes.
“Renters might see that policy as a way of lowering house prices a little bit,” Mr Wiltshire said. “Lots of those renters would be looking to buy and they will be looking for government to put in measures to improve housing affordability.”
He added the falling property market was less likely to be a concern in marginal electorates in regional NSW, such as Page, Eden-Monaro, Richmond and Gilmore, which saw price growth for both apartments and units.
Property markets across regional NSW held up better or even saw price growth last year, Mr Wiltshire said, but were now cooling — but not to the same extent as Sydney, which had a far greater boom.
Stewart Jackson, a politics lecturer at the University of Sydney, said falling prices may sway votes away from the ALP in some electorates like the safe and fairly safe Labor seats of Watson and Barton, which had the second and third-highest price falls.
“People are a bit worried about what’s happened, [the vote could sway] a couple of per cent … but I don’t think it will make a great deal of difference,” Dr Jackson said.
He added while renters might lean towards Labor, that might not translate to a victory in areas with a high proportion of renters, where many tenants such as international students would not be voting.
Australian politics professor Rodney Smith, also from the University of Sydney, added while the cooling market was a concern for voters, it would be far from the deciding factor come polling day.
He said economic management, health and education were generally the top three issues that affected how people voted, but he expected both parties to put a strong emphasis on housing policies.
“Both sides probably see the issue as something they can gain from and that they believe in. Labor’s put out its policies and will push for them as a means of improving housing affordability and getting people out of the rental market and buying their own homes. The Coalition will attempt to portray these policies as potentially [economically] risky and dangerous,” Dr Smith said.
|ELECTORATE||HELD BY||MEDIAN HOUSE PRICE DEC 2018||MEDIAN UNIT|
PRICE DEC 2018
|MEDIAN HOUSE PRICE YOY CHANGE (%)||MEDIAN UNIT PRICE YOY CHANGE (%)||OWNED OUTRIGHT (%)||OWNED WITH MORTGAGE (%)||RENTED (%)|
|Source: Domain Group data, ABS data. Note: Median is based on six months of sales to December, with minimum of 50 sales required.|
This article was first published in www.domain.com.au. Here is the link to the original article: https://www.domain.com.au/news/the-nsw-electorates-hardest-hit-by-the-property-market-downturn-815480/