It is an unmistakable sign of upcoming elections when election posters outshine property signage, especially visible here in Canberra, where no other billboard can distract us. My clients have asked me: “What will happen if I try to sell my property now? Will the general election impact the Canberra property market?”, so I will share my thoughts with you.
Firstly – while no one has a real estate crystal ball, I think it is worth reflecting on how previous general elections have affected our Canberra property market. Let us look through the lens of what I observed over the last 11+ years, taking current trends into consideration…
Uncertainty for work and life location
Typically, once a general election is called, the Canberra residential real estate market goes ‘on hold’. This is partly due to the fact that a fair percentage of our employment base consists of Federal and Territory public servants.
In case of a change of government, federal public servants could lose their jobs or be re-located interstate, and Territory public servants may well feel the knock-on effects, too. It is unlikely that any property buying or selling will take place until public servants know what their future will hold.
Looming changes to financial incentives
The Canberra property investor market also tends to be wary of making any changes to property portfolios until the final result of the general election is known. This year, this may be the case, especially as the Labor Party has flagged potential changes to its negative gearing and capital gains tax policies if it should win power. So, until investors know more about the potential effects of any new government, they may just sit tight on their portfolios (and hope…?).
Construction activity is high
Along with public service jobs, other work trends have a major impact on our housing market. Right now, one of the main types of work being carried out in Canberra is construction. Of anything and everything at once, it seems. A light rail system, innumerable multi-unit developments, entire new suburbs and urban infill across the city have left us with masses of building work going on throughout the ACT. All this development means that many of the construction professionals have moved here.
The unit market is changing
An over-supply of apartments for sale has seen unit prices easing, while an under-supply of rental properties had rental costs increasing. You could not be blamed for thinking that workers moving here temporarily would see value in buying an apartment to live in, and subsequently keep it as an investment property – but this doesn’t appear to be happening now. This, too, can probably be laid at the looming elections door. Uncertainty breeds caution.
Why people still will be in the market
Despite the above effects of a general election, particularly in reference to owner/occupier property, there are events in life that do lead buyers and sellers to be in the market. Many other buyers will have a requirement to upsize or downsize, and if they have sold their current residence, they will still be transacting in the marketplace.
Finally, people will always need to move, and Canberra remains a highly transitory population, no matter what is happening in government. A well-presented home combined with a comprehensive marketing program and a good agent will always sell. Contact me if you’d like an appraisal.