New property market data has appeared to confirm a link between elections and property sales
A decline in property sales was recorded in the months leading up to the 2011 and 2014 elections, according to a report by property market data company Valocity.
Property Institute of New Zealand chief executive Ashley Church said the market data is proof to a suspected link between New Zealand elections and a “cooling” of the property market.
“Between the announcement of the date of the election in March 2014, and the election in September of that year, there was an average drop in sales of 23% per month in Auckland – followed by an immediate recovery to previous levels, post-election,” Church said.
“The drop in sales leading up to the 2011 election is less dramatic – but it should be remembered that this was during a generally flat period of property activity whereas, in 2014, we were in the middle of a property boom.”
According to Church, the data from Valocity appears to confirm the same trend in the lead up to the upcoming September elections.
“In the 12 months between July 2016 and July 2017 sales volumes across the country are down by 55.4% (4229 properties) – but the majority of that drop has taken place since the election date was announced in February of this year.”
Other factors may also be affecting the property market but the impact of the election is clearly having an effect, Church said.
Church explained that according to the Valocity data, first home buyers are consistently accounting for fewer than 30% of all new mortgages across the country, while mortgages to investors remained steady at about 18% of all new mortgages for several months.
“Interestingly, refinancing accounts for around 20% of mortgages nationwide – which may be an indication that people are locking in longer term rates in anticipation of an increase in mortgage interest rates over the next couple of years,” Church said.
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Property Institute of New Zealand chief executive Ashley Church said the market data is proof to a suspected link between New Zealand elections and a “cooling” of the property market.
“Between the announcement of the date of the election in March 2014, and the election in September of that year, there was an average drop in sales of 23% per month in Auckland – followed by an immediate recovery to previous levels, post-election,” Church said.
“The drop in sales leading up to the 2011 election is less dramatic – but it should be remembered that this was during a generally flat period of property activity whereas, in 2014, we were in the middle of a property boom.”
According to Church, the data from Valocity appears to confirm the same trend in the lead up to the upcoming September elections.
“In the 12 months between July 2016 and July 2017 sales volumes across the country are down by 55.4% (4229 properties) – but the majority of that drop has taken place since the election date was announced in February of this year.”
Other factors may also be affecting the property market but the impact of the election is clearly having an effect, Church said.
Church explained that according to the Valocity data, first home buyers are consistently accounting for fewer than 30% of all new mortgages across the country, while mortgages to investors remained steady at about 18% of all new mortgages for several months.
“Interestingly, refinancing accounts for around 20% of mortgages nationwide – which may be an indication that people are locking in longer term rates in anticipation of an increase in mortgage interest rates over the next couple of years,” Church said.
Related stories:
Property Institute says housing to decide election
LVRs, election stall property market
