House prices have gone up by a quarter of a million dollars or more in 25 electorates across the country since 2022, with the value of a typical home in one affordable hotspot doubling since Aussies last went to the polls.
Big jumps in house prices in suburban electorates in Australia’s most affordable capitals have transformed the fortunes of many homeowners, including in one electorate where the median sale price rose by $365,500 since the last election.
Prices rose most rapidly in affordable areas, with most of the top 20 electorates ranked by how quickly house prices rose since May 2022 having median house prices ranging between $600,000 and $700,000.
Most of the electorates with the most rapid house price gains were mostly found in the outer suburbs of Perth, Adelaide and Brisbane.
In the majority of these areas, house prices increased by between $200,000 and $300,000 in just three years, but homes still remain relatively affordable compared with the rest of the country.
Labor holds the majority of the seats where prices rose most rapidly, while the Coalition holds most of the seats with price jumps of more than $300,000.
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House prices increased by $365,500 in the electorate of Tangney in Perth’s south, which includes riverfront suburbs such as Applecross and Bicton. Picture: realestate.com.au/sold
The data reflected the huge surge in prices in the smaller capitals in the years since the 2022 federal election, said REA Group executive manager of economics Angus Moore.
“The last three years have seen really strong growth in the smaller capitals across Australia – Brisbane, Adelaide and Perth and not so much Sydney and Melbourne,” Mr Moore said.
“That’s partly been a story at least initially of relatively affordability, but that’s becoming less and less true because of how much prices have increased in those markets.”
Rapid price surges in affordable electorates
House prices rose most rapidly in the electorate of Spence, encompassing Adelaide’s northern suburbs, which has been one of the strongest performing regions in Australia for house price growth in recent years.
The median home price in Spence has almost doubled since May 2022, rising from $305,000 to $600,000.
House prices rose by 78% in Burt, a Labor-held electorate in Perth’s outer south east, equating to a $285,000 gain. It was also the electorate where rents rose most rapidly since the last election, both for houses and units.
Prices increased by 68% in Brand in Perth’s south, covering the Kwinana and Rockingham regions, and 67% in Hasluck, which covers much of the city’s north east.
Home values have doubled since the last election in the seat of Spence that encompasses much of northern Adelaide, including suburbs such as Salisbury and Elizabeth. Picture: realestate.com.au/sold
Mr Moore said affordability wasn’t the only reason prices rose so much in these areas.
“It’s also been a lifestyle story of people moving to these areas during the pandemic and that preference persisting even as we move past that period,” he said.
“That’s seen a lot of demand for housing in those smaller cities, particular markets like Adelaide and Perth where it’s a bit harder to quickly accommodate extra demand, so we’ve seen prices rise really quickly as a result.”
In the electorate of Canning, which includes affordable coastal hotspot Mandurah, south of Perth, house prices rose 63% and unit prices rose 47% since the last election. Picture: realestate.com.au/sold
Even in Melbourne, where home-price growth has lagged the rest of the nation, house prices rose most in four Labor-held electorates on the city’s outskirts – McEwen, Gorton, Hawke and Lalor.
These electorates encompass many of Melbourne’s rapidly developing affordable hotspots, such as Werribee, Tarneit and Melton.
Mr Moore said more affordable areas within cities outperformed due to the effect of higher interest rates.
“As mortgages got a lot more expensive and borrowing capacities came back, buyers were looking a bit further afield so that supported a lot of those more affordable markets.”
In the unit market, electorates with the most rapid price roses followed a similar trend, although more more electorates in Brisbane and south east Queensland were represented, including opposition leader Peter Dutton’s electorate of Dickson where the median unit price rose $207,250 since 2022.
$300k-plus gains in three years
Electorates where prices rose the most in dollar terms tended to be priced a little higher – eight of the top 20 electorates ranked by house price gains had median prices higher than $1 million.
Labor-held Tangney in Perth’s south had the nation’s biggest price rise, recording a $365,500 gain to $1.17 million.
The median house price rose by $365,000 in Curtin, which includes suburbs such as Cottesloe, Swanbourne and Trigg. Picture: realestate.com.au/sold
Curtin in Perth’s affluent west, claimed by independent Kate Chaney at the 2022 election as part of the ‘teal wave’ that ousted many sitting Liberals from previously safe seats, followed close behind in second-place with a $365,000 jump to a median of $1.8 million.
Three of the five electorates with the biggest house price rises — Moore in Perth, Wright in Brisbane, and Sturt in Adelaide, were held by the Coalition.
On the other side of the country, many of the pricier parts of Sydney and Melbourne were among the electorates where house prices fell the most since the last election, with the biggest falls concentrated in Liberal or independent-held seats.
Rising prices make things tougher for homebuyers
Surging house prices have made many homeowners richer — on paper, at least — but those aspiring to get into the market are facing a tougher situation than ever.
“Since the last election in some of the smaller capitals we’ve seen a confluence of two factors: prices have grown a lot, and mortgage rates have gone up a lot,” Mr Moore said.
“That’s driven housing affordability from pretty good levels in 2021 to the worst level we’ve seen in all parts of the country.
“That’s obviously making it really challenging for first-home buyers and those looking to get into the market.
“It’s very hard to service a mortgage, and harder to save a deposit than it was a few years ago.”
The cost of living and housing affordability were the top issues Australians feel the government should focus on, especially among young people and renters, according to a recent survey by JWS Research.
While homeowners have benefited from the uplift in property prices over the past few years, investors have reaped huge rewards too.
Some of the electorates with the biggest price increases, such as the outer suburbs of Perth, have recently been the target of interstate investors seeking strong rental returns, who compete with first-home buyers for affordable homes.
What rising house prices mean for the election
With many buyers facing a combination of rising prices, high mortgage rates and increased competition, the housing policies of the major parties will be heavily scrutinised heading into the federal election, which at this stage is slated for May.
The latest Newspoll has the Coalition (51%) ahead of Labor (49%) on a two-party preferred basis.
However, the primary vote poll suggests neither major party would have enough votes to form a majority government, with the Coalition (39%) ahead of Labor (32%) and The Greens (12%).
The Australia Institute senior economist Matt Grudnoff said first-home buyers, who face the double-whammy of rising prices and rents, will look to the political parties seen to be taking the most action on housing.
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“As they watch prices race away from them, I think generally that’s going to be seen as a negative,” he said.
On the other hand, homeowners less affected by the cost-of-living crisis were less likely to seek change, Mr Grudnoff said.
“In places where people own their own home outright and have an income that’s kept pace with inflation, they’re not grumpy and they’re not feeling pain,” he said.
A study of 2022 federal election results by the Australian National University found homeowners were more likely to vote for the Coalition while renters were more likely to vote for Labor or the Greens.
The Australian Election Study also found the proportion of homeowners voting for the Coalition declined from 50% in the 2019 election, when Labor proposed negative gearing changes, to 38% in 2022, when both major parties adopted broadly similar housing policies.
Housing policies of the major parties
Ahead of this year’s election, Labor has focused on getting more buyers into the market with its Help to Buy scheme, where the government gives an equity contribution worth up to 40% of the property value that homeowners will have to pay back when they sell.
It also aims to fund the building of 30,000 social and affordable homes in five years through the $10 billion Housing Australia Future Fund.
The Labor government has also announced a two-year ban on foreign investors purchasing existing homes from April this year – an idea that the Coalition first proposed last year.
The Coalition aims to unlock up to 500,000 new homes in greenfield developments by investing $5 billion in critical infrastructure such as water, power, sewerage and access roads. Picture: Getty
Meanwhile the Coalition has proposed allowing Australians to access up to $50,000, or 40%, of their superannuation to buy their first home. The funds would need to be returned when the property was sold.
They have also proposed cutting permanent migration from 185,000 to 140,000 for two years in a bid to ease pressure on the housing market.
To boost the supply of new homes, the Coalition has promised to spend $5 billion on essential infrastructure to unlock an estimated 500,000 new homes in greenfield housing estates.
The Greens have proposed boosting housing stocks by creating a public property developer to build 360,000 good quality public homes over five years.
