Election to slow down property market
Since the 70s, almost two thirds of elections have stalled the property market, but experts are divided over the upcoming ballot.
With Prime Minister Kevin Rudd’s announcement of the election looming, Onthehouse has released research regarding the effects of federal elections on Australia’s property market.
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Since 1978 there have been 11 federal elections and according to Onthehouse, data for seven of those shows that the rate of housing price growth slowed for the three months leading up to the election.
Spokesperson for Onthehouse John Edwards said based on this past experience we should expect a slowdown.
“When taking the data into consideration, elections have clearly had an impact on the property market,” he said.
However, managing director of SQM Research Louis Christopher believes this election won’t have any impact on the property market.
“It is possible that if a party had a specific election policy/promise surrounding housing, such as a promise for a massive grant or the promise to eliminate negative gearing, then there would likely be an influence on the market,” he said.
“But at this point, no major party has made any such election promise and so I am tipping this election will have no effect on the property market.”
Onthehouse’s findings also suggest that after the market slowdown prior to the election, there is generally an upswing that follows.
“The data also shows that when growth does slow down prior to an election, it is followed by a rise in growth rates after the election,” Mr Edwards said.
“However, in years where growth rates did not slow prior to an election, there has been a tendency for the growth rate to slow following the election.”
Angie Zigomanis, director of BIS Shrapnel, believes there may be some trickle-through effect, but not until much further down the track.
“Later on there may be a policy introduced by the government that may affect the property market, but in the lead-up and immediate follow-up to the election the property market should remain the same,” he said.
