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Why the housing bubble spells big trouble for Labor


Labor voters have a price ceiling. In every suburb where the median house price is more than $700,000, voters swung to the Liberals or the Greens.

New analysis from a senior Labor official shows that in suburbs and towns where the median property is over $700,000, Labor did poorly. But in suburbs where the values were less, voters swung towards Bill Shorten’s Labor, and the cheaper the property, the bigger the swing. 

House price growth is tipped to slow next year after a strong first half.
House price growth is tipped to slow next year after a strong first half. Photo: Arsineh Houspian

The findings highlights the stark challenge Labor faces in “middle-class marginals” in the eastern suburbs, including Chisholm, which was won by the Liberals after 18 years of Labor control.

It also lays bare the battle it faces from the Greens in former inner-city strongholds including Batman and Wills. 

Opposition leader Bill Shorten speaking the day after the election in his seat of Maribyrnong.
Opposition leader Bill Shorten speaking the day after the election in his seat of Maribyrnong. Photo: Justin McManus

There has been an internal debate about where Labor should focus its energy, with the analysis confirming the party’s heartland is in outer suburbs. 

The analysis by ALP assistant state secretary Kosmos Samaras on his blog has compared local booth swings to median house prices listed on the Real Estate Institute of Victoria website.

Mr Samaras found in Melbourne suburbs with expensive homes voters “predominantly swung very hard against Labor.”

“Any suburb that carries a median house price above $700,000 swung against Labor. Geography and political history amounted to very little in the result,’ Mr Samaras wrote. 

House prices are a good indicator of how polling booths swung at the federal election
House prices are a good indicator of how polling booths swung at the federal election Photo: Warren Hackshall

Melbourne voting map

Melbourne Federal election 2016 voting map 

Housing affordability was an issue at the election, with Labor campaigning hard for reform of negative gearing rules in a pitch to those struggling to buy a home.

And the Turnbull government countered Labor’s attack on negative gearing, arguing change would damage property prices.

The Coalition only picked up one seat from Labor in Victoria; Chisholm, where several suburbs have median house values of more than $1 million.

In Burwood, where the median is $1.13 million, Labor suffered a 5.2 per cent swing against it. In Chadstone, where houses are worth $812,000, Labor’s negative swing was smaller at 4 per cent. 

In Dandenong, where the median house price is $490,000, the party enjoyed a massive 8.9 per cent swing back to Labor and it retained the seat of Bruce with a 2.5 per cent swing to it.

Labor also recorded positive swings in Langwarrin, Marong, Caroline Springs and Hampton Park, where house prices are on average under $500,000.

The story was the same in Corangamite, which the Liberals retained. In Bannockburn the median price is $385,000 and Labor enjoyed a 2 per cent swing to it, but in Barwon Heads, where property is nearly $500,000 more expensive, the Liberals had a 4.5 per cent positive swing. 

In his blog, Mr Samaras also highlights that seats which have a high median house price also have a large number of negative gearers, which he says is “especially problematic” for Labor in wealthier marginal seats such as Melbourne Ports, where 10,683 people have negatively geared. 

“The more expensive the suburb, the strong likelihood Labor lost votes,” Mr Samaras said.

“Labor did really well in the seat of Dunkley simply because many of its population centres carry median house prices well below the average found in Melbourne’s inner south east. The same can be said for pretty much most outer suburban seats, irrespective of their margin.”

Swings away from Labor in wealthy areas did not just flow to the Liberals, with the Greens winning strong backing in expensive inner-city seats at Labor’s expense, continuing a demographic trend of the Greens eating into once-strong Labor areas as high prices rising.

Monash University political scientist Dr Paul Strangio said the relationship between property values and swings was unsurprising given Labor’s campaign was focused on its working-class base.

Dr Strangio also was not surprised that only one seat changed hands in Victoria because the state’s economic situation was much better than other states. 



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