The property industry should brace for impact if Prime Minister Kevin Rudd decides to postpone the September election date to later in the year – and into the spring selling season.
The warning comes even though the property market has continued to perform quite strongly over the past few months, indicating a slow and steady recovery is at hand.
There is speculation among political circles Kevin Rudd could change the date, as after he took the leadership position he commented the September 14 date was not set in stone.
Andrew Wilson, chief economist at Australian Property Monitors, told SmartCompany while cyclical factors in the property market are likely to outweigh any political impact, “certainly things have changed”.
“We have less certainty now than we had a few weeks ago,” he says.
Wilson explains political elections tend to have more of an impact when there are major issues at stake – such as the 2007 election which is widely attributed to the introduction of the WorkChoices system.
The upcoming election features no such polarising issue, Wilson explains, but the return of Kevin Rudd to the prime ministership is a wild card. With several weeks until the election, there is still time for those issues to present themselves.
This means there is a possibility the property industry could still feel the impact of an election. During uncertain times, potential buyers are more likely to delay any purchasing decision.
“Given that we may now push the election into the spring season, we may see some moderating impact particularly if we see bigger policy differences, which now may be more likely,” he says.
“The game has changed.”
However, as Wilson points out, the property market has continued in its steady recovery.
According to the Real Estate Industry of Victoria, Melbourne recorded a 71% clearance rate this past weekend, compared to 58% in the same weekend last year. In Sydney, the city recorded a 77.5% clearance rate.
Wilson says given the strong recovery of the market the election won’t have much of an impact on sales overall, but acknowledges there could be some movement.
“There is a lot of enthusiasm and confidence in the market generally…but we just have more uncertainty now than we did a few weeks ago. There could be an impact.”