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The 12 electorates that could name the next Prime Minister

·4-min read
Chart showing housing stress electorates, Prime Minister Scott Morrison, aerial view of Australian suburb.
New analysis has revealed the electorates that could decide the next Prime Minister. (Images: Getty).

Australia’s worsening housing affordability crisis isn’t going away and it could be the issue that shapes the next federal election, new analysis of mortgage stress data has found.

Analysis by the UNSW’s City Futures Research Centre has found 12 outer suburban areas where the combined number of financially stressed homeowners and tenants equate to more than half of all households.

Of those electorates, four of them are marginal or ‘swing’ seats.

Source: Digital Finance Analytics, UNSW City Futures Research Centre. (Created with Datawrapper).
Source: Digital Finance Analytics, UNSW City Futures Research Centre. (Created with Datawrapper).

Commenting on the research, national spokesperson for homelessness advocacy group Everybody’s Home, Kate Colvin, said the issue of housing affordability is shaping up to be a key election decider.

“Whether for owners or renters, Australian housing has seen tearaway growth in prices. At the same time, large swathes of the community have seen their livelihoods and income security collapse,” Colvin said.

“Social and affordable housing is the missing piece of this jigsaw. Politicians of all political persuasion must be prepared for housing inequality to emerge as a major federal election issue.”

Across Australia, around 57 per cent of lower income renters are spending more than 30 per cent of their income on payments, while 41 per cent of lower income homeowners are spending at least the same amount, the latest Australian Bureau of Statistics data has found.

And overall, 41.7 per cent of households were experiencing mortgage stress in July, analysis by housing research platform Digital Finance Analytics recently revealed.

The electorates in mortgage and rental stress

Among the top electorates for rental stress, four are marginal seats, with the vast majority also located in NSW.

(Created with Datawrapper).
Source: Digital Finance Analytics, UNSW City Futures Research Centre. (Created with Datawrapper).

The most stressed electorates among mortgage-holders are more evenly shared across the country, although there is still a heavy weighting towards NSW electorates. Of these stressed electorates, seven are marginal.

(Created with Datawrapper).
Source: Digital Finance Analytics, UNSW City Futures Research Centre. (Created with Datawrapper).

Morrison’s popularity slumps; experts predict property will decide next election

The latest Newspoll ratings show that 50 percent are dissatisfied with Prime Minister Scott Morrison’s performance, but he still leads opposition leader Anthony Albanese 47-35 as the preferred leader.

Both leaders lost ground to smaller party leaders, with Morrison’s net satisfaction rating now at its lowest since March 2020.

“One of the biggest concerns we have is that the housing crisis always seems to be someone else’s problem,” report co-author, University of South Australia professor Chris Leishman said.

“The Commonwealth Government sees it as something the market will fix, APRA has minimal interest and the RBA states that it is outside its remit. Meanwhile, Australian banks and households are gambling everything on the hope of continuously increasing prices.”

Noting this, the researchers argued for the Reserve Bank of Australia (RBA) to take a stronger position in preserving housing system stability, as part of a greater Government focus on delivering a less volatile housing market.

“With house prices and mortgage borrowing once again surging in 2021, Australia’s household household debt is now at a record national high,” warned report lead author Professor Duncan Maclennan.

“It’s especially concerning that all Australia’s major banks have internationally high residential mortgage exposure. That means Australian households and the overall financial system have become highly exposed to interest rate change rates and external economic shocks.”

The researchers found that household debt has risen from 70 per cent in 1990 to nearly 185 per cent in 2020, relative to GDP.

Of that, around 75 per cent of the debt is in mortgages and 60 per cent is held by banks in the form of mortgages.

Record house price growth as RBA, APRA, Government wash hands of issue

The June quarter saw Australia mark its biggest rise in national capital city house prices since the ABS began keeping track 20 years ago, at 6.7 per cent growth.

The RBA last week noted that the record low interest rates are contributing to storming house prices, but added that the country’s tax system is also to blame.

Home owners are more inclined to hold off selling due to capital gains tax concessions and the fact that the family home isn’t included in the Age Pension means test, the RBA said in a parliamentary inquiry into housing affordability

“Some features of Australia’s tax and transfer system incentivise owner occupation and investing in property, and discourage mobility,” the RBA said.

“This affects the balance of demand and supply in the housing and rental markets, and may contribute to affordability pressures for some.”

And it added that while it understands the role of negative gearing as part of the broader tax system, it believes there is an argument for looking at the tax system “in a holistic way”, including negative gearing.

The Government, for its part, has fired back, with Treasurer Josh Frydenberg agreeing that it could be worth reviewing the RBA’s performance, after it has missed its inflation target since 2015.

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