Marginal seats in most unaffordable property markets could shape election

The pressure on governments to get housing policy right is reinforced by the high proportion of marginal seats that are home to the least affordable property markets.

Around a third of the most vulnerable seats in the upcoming Australian federal election have housing markets that are chronically out of reach for ordinary voters.

Politicians looking for a housing policy point of difference should pay heed to where their prospective supporters are finding it most difficult to put a roof over their head.

Of the 150 electorates that will be contested on 3 May, 41 are knife-edge marginal seats held by a margin of less than 4 per cent.

API Magazine analysis reveals that six of those 41 are among Australia’s most unaffordable electorates in which to buy a home.

Of the 10 major centres outside the top 20 with dire home affordability, half are in tenuously held marginal seats.

The Liberal-held marginal seats of Bradfield and Banks have two of the three least affordable property markets while Labor’s housing policies should be targeting the strained electorates of Chisholm and Gilmore.

Voters in Sydney have the most to be aggrieved about when it comes to housing. Four of the top 5 and 12 of the top 20 most unaffordable electorates are in the New South Wales capital.

Both major political parties have been criticised for housing policies that fail to tackle the severity of the problem and the latest CoreLogic housing affordability data reinforces the scale of the task confronting the next government.

“An imbalance between housing supply and demand, alongside cost-of-living pressures, high interest rates and low savings has pushed the cost of owning or renting a home higher, placing immense pressure on many Australians, particularly first-time homebuyers and renters,” Tim Lawless, Research Director, CoreLogic, said.

Among the four CoreLogic measures of housing affordability, each was either equal to or at new record highs for unaffordability at the end of 2024.

The full list of housing affordability metrics by electorate is here, with highlights showing the marginal seats in the upcoming election (article continues below lists).

Nationally, the ratio of dwelling values to household incomes has been above 6 consistently since 2003, reaching a record high in 2022 and again in December 2024 at 8.0. A ratio of 8 means a household on the median income would be spending eight times their annual gross income to purchase the median value dwelling.

“In December, a median-income household purchasing the median value dwelling with a 20 per cent deposit would be dedicating just over half their gross annual income to mortgage repayments,” Mr Lawless said.

“It’s also taking a record number of years to save for a 20 per cent deposit at 10.6 years, assuming a household can save 15 per cent of their income, which is a major challenge when cost of living pressures have been high.

“To make matters worse, rental affordability has never been this stretched, with rental households requiring roughly one third of their income to pay rent.”

Housing policy alternatives

Declining affordability was observed across all states and territories, with the steepest drop recorded in Western Australia (down 2.5 percentage points) and the smallest decline in Victoria (down 0.6 percentage points). Rising property prices have been the primary driver of reduced affordability, with larger mortgages required to secure a home.

Retirement Living Council (RLC) Executive Daniel Gannon said the political parties were too locked into antiquated ideas to move this dial.

“Prehistoric policies are locking older Australians in large family homes during a housing crisis when ‘rightsizing’ initiatives should be front and centre to ease pressure on housing and healthcare systems,” Mr Gannon said.

“It’s absurd that policies written decades ago are expected to keep up with modern day house prices and cost of living.”

He urged the major parties to tackle the housing crisis by unlocking more than 59,000 homes through key reforms that would allow single homeowners to downsize without their pension being jeopardised, and by removing the incoming purchase price threshold for age pensioners who downsize into retirement villages.

The head of Australia’s largest home builder, Brad Duggan of Metricon, has called for a National Housing Summit to confront the deeper structural issues that are locking thousands of Australians out of home ownership.

He said the policies of the major parties will help ease pressure for some buyers, but added that both sides are yet to address the real barrier: the system’s inability to deliver homes at the scale and speed Australia urgently needs.

“Support for first home buyers is vital, and we welcome Labor’s expanded First Home Guarantee and commitment to build 100,000 homes,” Mr Duggan, CEO, Metricon, said.

“But unless we fix the root causes of the housing crisis—supply, workforce, planning and approval efficiency—we’ll just keep making the same promises every election cycle.”

Mr Duggan warned that the Australian Government’s 1.2 million home target is in serious jeopardy unless governments work with industry to boost workforce capability and capacity along with approval timelines. He also called for a Housing Report Card to hold governments accountable for delivery and affordability targets.

“We need real transparency and real consequences.”