Property Investment

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Private property issue #72 - How does the election affect the property market?

People always say the election impacts the property market. But is it actually true? I dug into property market data from the past 9 elections to find out. Here’s what I found:


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People always say the election impacts the property market.

But is it actually true?

I dug into property market data from the past 9 elections to find out.

Here’s what I found:

Do Kiwis buy fewer properties right before an election?


Kiwis buy about 12% fewer properties before the election compared to after.

This graph shows how many properties Kiwis buy and sell 12 months either side of an election:

Here’s what we see:

  • People start to buy fewer properties about 10 months before the election
  • 3 months after the election, there is a massive upturn. Kiwis start to buy more properties

In the above data, I've excluded the 2020 election. That’s because we’d just come out of Covid, and the property market had an enormous boom. So 2020 probably doesn’t give us a clear view of the trend.

So, let’s look at another election to see how it changed the property market.

This election feels like 2008

Of all the elections I’ve seen, this year feels like 15 years ago, in 2008. Back then:

  • The country was in recession and going through a rough economic time
  • Property prices had been falling rapidly

Sounds familiar. So, what happened back then?

  • 12 months out from the election, people were still buying lots of properties
  • As we got closer to the election, the property market plunged. People bought way fewer properties
  • But after the election, property sales started increasing again

Was it all down to the election? No.

Some of it is down to the natural cycles of the property market. But this is consistent with the overall trend.

Does it matter who wins?

Property sales take off more when National wins an election than if Labour wins.

That’s what the data says.

If Labour gets in, you still see a slight increase in property sales after the election. But not to the same degree.

While this graph contains 20 years of property market data, that’s only 10 elections. 

5 won by Labour. 5 won by National. 

So, it’s a small sample size. This can sway the results. 

Still, the trend is clear. If the government changes, property sales will likely increase.

Does the election impact property prices?

No, not really.

Property prices tend to increase over time.

So, if you look 12 months on either side of an election, you’re looking at 2 years.

If you do this for 9 elections, you’re crunching 18 years of house price data.

Property prices tend to go up by 6 – 7% a year. So, it’s no wonder that property prices are usually 6% lower before the election and 6% higher after the election (on average).

The most interesting point is that property prices (on average) don’t go down right before the election.

Why does the election affect house sales?

The average Joe-public doesn’t like buying properties before an election. They like to wait, just to “see what happens”.

They feel nervous about making a large financial decision. That makes sense when the country’s direction is uncertain.

But as the election result sinks in:

  • People feel more confident as they get to grips with the new government
  • They feel more confident that they understand any new policy settings
  • There is a natural bounce after the pull-back directly before the election

It’ll be harder to buy a house after the election

As we’ve seen, people say: “I’m going to wait to buy until after the election”.

That presents an opportunity for buyers.

That means there's less competition if you buy before the election compared to after.

So, it could be a good time to put in offers 0 - 10 months out from the big day.

More people will enter the market once officials have counted the votes.

If you decide to wait till after the election, you will face more competition. That’s whether or not we see a change in housing policy.

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Andrew Nicol

Managing Director, 20+ Years' Experience Investing In Property, Author & Host

Andrew Nicol, Managing Director at Opes Partners, is a seasoned financial adviser and property investment expert with 20+ years of experience. With 40 investment properties, he hosts the Property Academy Podcast, co-authored 'Wealth Plan' with Ed Mcknight, and has helped 1,894 Kiwis achieve financial security through property investment.

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