New report challenges the link between elections and housing trends
Australian federal elections have a smaller effect on housing market trends than commonly believed, new research from Domain has found, challenging long-standing assumptions about how political cycles shape buyer behaviour, auction patterns and price movements.
The report, which reviewed data from the past seven federal elections, shows that neither major party consistently drives stronger property growth. According to the analysis, house prices grew marginally more under Liberal governments (3.1% annually) compared to Labor (2.9%).
However, Labor-led periods saw stronger growth in unit values (4.5% vs 1.4%) and higher first home buyer activity, with first home owner-occupier loans making up 34.4% of the market, compared to 30.5% under Liberal leadership.
One surprising trend noted in the Domain report was around election day auctions. Despite a 50% drop in the number of auctions held on election days, those that did go ahead recorded higher clearance rates (60.4%) than those held the Saturday before (59.5%) or after (59.8%).
Domain’s research also looked at how political uncertainty can affect transaction volumes. While election periods typically do not lead to significant slowdowns in buying activity, rising uncertainty was linked to reduced sales. The firm’s modelling suggests that a one-point increase in uncertainty could result in 8.08 fewer property sales, with prolonged uncertainty potentially leading to thousands of missed transactions.
“The property market is shaped by forces beyond politics,” said Nicola Powell (pictured above), chief of research and economics at Domain. “While elections can affect policy and sentiment, the reality is far more complex than our long-held beliefs suggest.”
A separate study by Mortgage Choice has revealed that for 87% of Australians, housing policy will influence how they vote. The report also shows voters want more government action, with top concerns including affordability (65%), housing supply (47%), first-home buyer support (37%), rent control (35%) and investor tax incentives (31%).
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