With housing topics such as affordability and taxation policy featuring heavily in the lead up to the Federal Election, it’s worthwhile examining how house values have shifted since the previous election. Since the 2013 federal election home values have generally been increasing however, these rises have largely been fuelled by the Sydney and Melbourne markets. This has been reflective of the economic performance of the country with Sydney and Melbourne doing the heavy lifting for the rest of the country on the back of their larger services sectors and less exposure to the mining related downturn in infrastructure spending.
The Bennelong electorate has recorded the greatest increase in house values over the past three years. Over the period, house values in the electorate have increased by 73.5%, with values rising 23.0% over the past 12 months. In stark contrast, the Durack electorate in Western Australia, which takes in many mining regions in northern Western Australia, where house values have fallen by -21.0% over the past three years.
Looking at the list of the 20 electorates which have seen the greatest increases in house values over the past three years, what is immediately apparent is they are mostly located in New South Wales. In fact, all of the top 20 electorates are located in either Sydney or Melbourne. This further highlights that the recent boom in housing has been focussed across these two cities reflecting the country’s economic performance of late.
While house value growth has been strongest in Sydney and Melbourne, the regions with the weakest three year house value changes are largely in regional parts of the country and are linked to the resources sector. Those areas located in capital cities are in Perth and Darwin (which have been impacted by the mining downturn), Hobart (the weakest performing capital city housing market over the past decade) and Canberra.
The mining story amongst the list of electorates with the lowest house value change is an interesting one. Many of the electorates which have seen the lowest home values changes over the past three years are regions linked to the resources sector. In the lead-up to the 2013 Federal election these same electorates had seen some of the highest increases in home values on the back of surging mining investment which propelled home values higher. As the resource investment boom has faded many of these regions have seen home values decline as the workforce has shrunk. The value declines have been driven by a lack of demand for housing in these regions due to their heavy reliance on the resources sector.
The performance of most individual’s single largest asset is likely to hold some sway over which candidates voters in electorates will vote for. It is a little surprising that topics such as housing affordability, particularly in Sydney and Melbourne, and economic drivers of regional areas has not been at the forefront of the election campaign. Perhaps these issues will become more prominent over the final weeks of the election campaign.
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