Total Mortgages Ask the Question, "What Impact If Any Will the Elections Have on the Economy?"

With New Zealand set to go to the polls on September 23rd, just over a week away, what impact if any will that have on the economy, and the property market in particular? The answer to this question is obviously extremely important to anyone considering buying a house or investment property, and to their ability to access a mortgage.

The upcoming election, more than any election in recent history, has prospective buyers stopping to think again, in particular with the Labour party’s suggestion of a capital gains tax. Added to these are the LVR’s and banks’ lending restrictions tightening up, which all makes for a very jittery property market.

A Valocity analysis shows there was an impact from the last elections, with a decline in sales volumes in 2014 between the period when the general election date was announced in March 2014 and when the country went to the polls in September 2014. This drop in sales volumes is clearly uncharacteristic when compared to sales volumes from the previous and following year.

Valocity Valuation Manager James Wilson says the drop in sales volumes is likely attributed to the market adopting a ‘wait and see’ approach. “It’s common for many local market participants to put purchase decisions on hold given there is a degree of uncertainty in the market due to the range of economic policies on offer during an election year. International investors will also adopt the same cautious approach, given their primary concern is market stability,” he says.

“What is notable is the significant increase in sales volumes that occurred immediately after the 2014 election, and continued into the first quarter of 2015 – indicating a stable government has a direct bearing on market confidence. Their analysis clearly indicates a general election can have an impact on the New Zealand property market given volumes typically decline in the lead up to polling day as people adopt a ‘wait and see’ market approach.

The re-election of the current Government has obviously played a significant role in ensuring stable market conditions, a large attractor for both local and international market participants. A change of government in the future is likely to create different market conditions – particularly in the period post-election.

The advantage of considering a mortgage with Total Mortgages is that they have increased competition, and offer a larger spread of loan products, so for more information on NZ mortgage rates, Hamilton mortgages and loans Hamilton please go to http://www.totalmortgages.co.nz .