The property market could be impacted by uncertainty arising out of the Federal Election, with buyers possibly holding off on the decision to purchase or sell until a more stable government is formed, property experts warn.
SQM Research founder Louis Christopher says right now the impact is marginal, but if uncertainty continues then buyers could be affected and may even hold off on a purchase or sale.
“I think if this environment lasts for more than few weeks, then it has a real chance of impacting the market. Not necessarily the real estate market alone, but the economy in general. It could result in fewer buyers.”
While Christopher says investors or would-be buyers aren’t likely to hold off from entering the market just because the Government is negotiating, many will hesitate if the future of their jobs is in doubt.
“You won’t hesitate for much, but if you think the Government has a real chance of impacting your industry, and if you’re a business owner and you’re not sure where revenue is coming from, you won’t buy a house because of that. So the uncertainty seeps into a lot of decision-making.”
Real Estate Institute of Australia president David Airey says the current uncertainty is unlikely to majorly impact the market given that neither of the major parties delivered any significant promises for housing reform.
“It’s not going to make a huge difference. The only problem is that the uncertainty that has occurred over the last few months will continue because of the caretaker government.”
However, Airey says if the banks make any sort of move on interest rates, then the reaction from the parties will play a part in affecting buyers’ decisions.
“If the banks start to tinker with interest rates, who would do the complaining? Either side will be complaining, and get away with it, but it puts both parties in a difficult position because they will blame the other side.”
“I see that as being the most significant threat, although as far as the general market is concerned I don’t think it makes much difference.”
Meanwhile, auction results in Melbourne remained in the mid-70s, although only a few hundred of properties were listed due to the Federal Election.
“In comparison to the last few weekends, and the next few, there was a low number of auctions this weekend due to the Federal Election. This however has not had any negative impact on demand with a clearance rate of 75% being recorded,” REIV chief executive Enzo Raimondo said in a statement.
Out of 300 auctions, 225 were sold and 75 passed in. The total value of sales came to $166.91 million, with another 740 auctions expected next week.
In Sydney, 66% of the 112 properties on the market were sold, with total sales coming to $58.8 million. Brisbane recorded six sales out of 22 properties, with sales at $3.6 million, while Adelaide recorded just three sales out of 10, with a total of $1.8 million.
Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.
