Sydney’s property downturn took a toll on homeowners in the city’s middle-ring suburbs, with voters in key marginal seats among those most affected by declining property values.
One in every five federal electorates across New South Wales posted double-digit house price drops in 2018, according to recent data from Domain, with the Liberal seat of Bennelong recording the biggest drop. The electoral division’s median decreased 16.3% year-over-year.
Electorates whose median dwelling value is between $1m and $1.5m had the biggest declines, said Domain Economist Trent Wiltshire. Nine of the 15 electorates that absorbed the most impact, as well as the marginal Sydney seats of Reid and Banks, were held by the Liberal Party.
“These are the more expensive areas, but not the most expensive,” Wiltshire said. Liberal seats tended to have higher rates of home ownership because of higher income levels and an older demographic, according to the economist.
On the other side of the fence, Labor electorates were mostly comprised of renters, who experienced a worse case of apartment prices falls.
The city’s west, north west, and south west recorded the biggest unit price drops were. The seat of Fowler — which covers the Liverpool region — was hit the hardest with an 11.5% annual decline.
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 led the list of areas with the highest unit price falls.
Domain reported that buyers in the area are most concerned about the election and potential changes to negative gearing and the capital gains tax discount if the Labor Party wins.
“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. It’s definitely a big question on buyers’ minds and rightfully so,” said Dean Jr Boskovic of BOS Realty.
First-home buyers in the area approve of abolishing negative gearing, but, investors and homeowners wanted the policy to stay.
“[Boskovic] said [that the]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,” said Domain in their report.
The Liberal-held electorate of Bennelong, meanwhile, logged the biggest hit to house prices, and the election was top of mind for sellers.
Wiltshire said electorates with a greater proportion of renters were likely to be open to the idea of possible housing-related tax changes.
“Renters might see that policy as a way of lowering house prices a little bit. 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 said.