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What impact does a general election have on the housing market?

As we gear up for another general election in New Zealand, it's a perfect time to reflect on the profound impact these political events can have on our housing market. Historical data reveals intriguing patterns that shed light on the dynamic relationship between elections and real estate. Let’s explore how general elections have shaped the New Zealand housing market over the years.

The Dance of Supply and Demand:

One of the most noticeable effects of a general election on the housing market is the ebb and flow of supply and demand. Elections can introduce a degree of uncertainty, causing potential buyers and sellers to adopt a wait-and-see approach. This often leads to a temporary decrease in transactions as people hold off on making major financial decisions.

Historically, data shows that in the lead-up to a general election, housing inventory tends to increase as potential sellers test the market. This influx of supply can provide more options for buyers but may also put downward pressure on prices.

Policy Shifts and Market Sentiment:

A general election can signal a potential shift in government policies, particularly those related to housing. Proposed changes in regulations, tax incentives, and social programs can significantly influence buyer behaviour.

For instance, policies aimed at incentivising first-time homebuyers or regulating property investment can lead to shifts in market dynamics. Buyers and sellers may adjust their strategies in response to anticipated changes, affecting both prices and transaction volumes.

Historical Highlights:

Let's take a brief stroll down memory lane to see how past general elections have left their mark on the New Zealand housing market:

1987 - The Boom and Bust:
The 1987 general election was followed by a significant property market crash. Economic reforms introduced by the new government brought about a period of uncertainty, causing prices to plummet.
1999 - A Flourishing Market:
The 1999 election saw a change in government, and the subsequent years witnessed a housing market boom. Low-interest rates and a thriving economy fueled rapid price increases.
2017 - Foreign Buyer Ban Impact:
The 2017 election brought discussions about restricting foreign property investment to the forefront. This led to a temporary slowdown in the market, as both local and international investors adjusted to the new policies.

As we approach the next general election, it's important to keep in mind that while historical data provides valuable insights, every election is unique. External factors, global economic conditions, and unforeseen events can all play a role in shaping the housing market's response.
Here's to a vibrant and resilient New Zealand housing market, regardless of what the future holds in the ballot box!


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