House prices putting pressure on Holt

Housing affordability is a big issue in Holt, photo Courtesy of ABC News.
Families fear being locked out of Holt's property market making housing affordability a major election issue. James Willis and Justine Vemer report.

Housing affordability is becoming a major election issue for property buyers priced out of the market in Holt.

Families looking to enter the area’s strong property market fear being locked out of the “great Australian dream” as demand outweighs supply.

Prospective buyer Patricio Acevedo said he feared being “priced out” of the local market due to lack of affordable housing in the area.

Mr Acevedo, who recently viewed a two-bedroom unit in Narre Warren priced at $285,000, said real estate values across the electorate were too high for families to afford.

“I really don’t know what the market will do at the end of the year, the next two years or five years,” Mr Acevedo said.

He said he feared not being able to enter the local property market due to the area’s high prices.

“We might just go for it and pay what the real estate agents ask for, which is a high price,” he said.

Federal Opposition Leader Bill Shorten revealed plans earlier this year to change negative gearing rules for property purchases. The Coalition has said Labor’s policy would “smash” home values. Labor argues its policy will have a moderate effect on home prices, encourage new home building and help level the playing field for first home buyers competing with investors.

Real Estate Institute of Victoria (REIV) figures (March 2016) revealed that the average house price across Holt was about $460,000.

Endeavour Hills topped the price list at $530,000, followed by Narre Warren $462,500; Hallam $440,000; and, then Cranbourne $366,500.

Narre Warren experienced less than 30 sales in the last quarter.

Australian Bureau of Statistics (ABS) showed that the average weekly household income of Holt residents was $1257.

Figures indicated that more than 52 per cent of households had a mortgage and 62 per cent of those employed worked full-time.

Despite record-level low interest rates, Cranbourne First National real estate agent Jason Brown said there was a need for more sub-division and development to alleviate demand and curtail prices.

Mr Brown said the area’s high property prices forced potential buyers to borrow well above their means and then potentially “come undone”.

He said many buyers were families with a single income who were no longer able to sufficiently borrow enough to buy into the market.

“This has the possibility of creating a high level of uncertainty amongst buyers,” he said.

City of Casey mayor Sam Aziz acknowledged the issue was a concern and said that the council would look at measures to stem the shortage of affordable housing in the area.

“We have initiatives in place to encourage high density housing and facilitate zoning,” he said.

However, Cranbourne Stockdale & Leggo managing director Malcolm Sloan, dismissed buyers’ fears and the market mood, saying the lack of affordable housing in the area was “absolutely untrue”.

Mr Sloan also said government housing was in short supply, facilitating the need for negative gearing to prompt investors into the market.

“I think negative gearing’s got to stay,” he said.

Leading up to the July 2 poll, both Labor and the Greens have pledged to change negative gearing, while a re-elected Turnbull Government would keep the existing arrangements.

For Mr Acevedo, however, the future remains uncertain as he and his family try to find not only an affordable property, but be part of the great Australian dream.