What elections really mean for buyers and sellers

As we head towards another election, housing is once again part of the political conversation. Tax settings, housing supply and the cost of living are all competing for voters’ attention, while buyers and sellers are left wondering whether a change of government could also change the trajectory of the property market.

For some, that uncertainty can be enough to delay a decision.

But an analysis of previous elections by Opes Partners Economist Ed McKnight suggests the ballot box itself has surprisingly little influence on house prices. Where elections do appear to make a difference is in transaction volumes, with a small but consistent group of buyers seemingly choosing to sit on the sidelines until the political picture becomes clearer.

“The main thing that I’m seeing though, is that the election has almost no impact on house prices,” McKnight says.

Looking back across 11 New Zealand elections, McKnight analysed the market using seasonally adjusted figures, stripping out the usual fluctuations caused by the busier spring and summer selling seasons. The result is a useful reality check for anyone considering delaying a property decision purely because an election is approaching.

Buyers take a brief breather

While prices appear relatively indifferent to elections, sales activity tells a slightly different story.

McKnight’s analysis shows a modest but recurring reduction in transactions ahead of elections, followed by a corresponding lift afterwards.

“We typically see about one in 20 properties stepping back before the election, and then one in 20 properties stepping forward after the election,” he says.

Put another way, sales tend to sit around five percent lower ahead of an election relative to the average across the period analysed, before rising by a similar amount afterwards.

It is hardly a market shutdown, but it does indicate that political uncertainty can influence the timing of some purchasing decisions.

“It’s small, but it’s there,” McKnight says.

Importantly for prospective vendors, the slowdown does not appear to be driven by homeowners refusing to list.

McKnight found the difference in listing activity around elections was only around one percent, suggesting sellers generally continue to bring homes to market.

Instead, the more noticeable movement occurs on the demand side.

Housing stock tends to build in the five or six months before an election, with available listings sitting roughly five percent above the average across the periods analysed. After polling day, that inventory gradually begins to ease as buyers return and transactions pick up.

“We do see a build-up before the election, and then we see an easing about six months after, which is basically saying that we do see buyers stepping back, then we see them stepping forward, and it starts to work itself out.”

The takeaway is that election-year caution exists, but its scale matters.

“I don’t want to overhype the election’s impact because we’re talking about five to 10 percentage point movements, but it is there.”

Correlation isn’t always causation

One reason elections can appear more influential than they really are is timing.

An election occurs against a much broader economic backdrop. Interest rates, credit availability, employment, migration, household confidence and the wider economic cycle can all exert substantially more pressure on property activity than politics alone.

The 2008 election is a prime example.

That year coincided with the Global Financial Crisis and a sharp deterioration in lending conditions. Property transactions fell before recovering after National took office.

Viewed superficially, the rebound could be attributed to the change of government, but McKnight says the economic context tells a much more compelling story.

“It’s very easy to point back and say, ‘Well, it was the switch from Helen Clark to John Key,’ but actually it wasn’t due to that.”

Banks had tightened lending as the global financial system came under immense pressure. As conditions subsequently eased, transactions recovered.

The unusual 2020 election provides another example. House prices were rising rapidly heading into polling day and continued climbing afterwards, but that extraordinary period was dominated by pandemic-era monetary stimulus, exceptionally low interest rates and other economic forces rather than the election result itself.

The lesson for buyers and sellers is to distinguish between events happening around an election and those happening because of one.

“The market does what the market does over time,” McKnight says.

That distinction could prove particularly important this election year as households continue to weigh borrowing costs, employment prospects, household finances and confidence alongside the policies being presented by political parties.

What happened last time?

The 2023 election provides perhaps the most relevant recent case study.

House prices had bottomed around May that year and were already beginning to recover before New Zealanders went to the polls in October. Values continued rising until early 2024 before weakening again.

The incoming National-led government subsequently implemented several significant housing policies, including restoring mortgage interest deductibility for residential property investors, shortening the bright-line test and changing residential tenancy settings.

Yet McKnight says even these material changes did not translate into an obvious election-driven shift in house prices.

“None of that really had an impact on property prices, or a noticeable impact.”

That does not mean government policy is irrelevant to property owners or investors. Tax rules and tenancy regulation can materially change the economics of owning a rental property, while infrastructure, planning and housing policies can influence supply over longer periods.

But policy changes do not operate in isolation, and their effects on national house prices can be overwhelmed by larger forces such as mortgage rates and access to finance.

McKnight previously compared house-price performance under National and Labour governments and found that, at the time of his analysis, values had actually risen faster on average during periods when Labour was in office.

That doesn’t mean Labour governments cause house prices to rise faster, he stresses. Rather, it demonstrates the danger of attributing broad market movements to whichever political party happens to be governing at the time.

A different housing debate in 2026

Housing may also play a somewhat different role in this year’s election than it did in 2023.

Three years ago, property was a particularly charged political issue following significant changes affecting residential investors, including the extension of the bright-line test and the removal of interest deductibility.

“There was a real incentive for landlords to advocate for change.”

Since then, many of the policies promised by the current Government and its coalition partners have been implemented, including the return of interest deductibility, a shorter bright-line period and changes to tenancy rules.

“I feel like a lot of people don’t remember how much has changed over the last three years,” he says.

That means the political contest over housing may be less defining this time around, even as parties continue to put forward differing approaches to property taxation, landlords and wealth.

Minor parties have proposed more substantial changes in some areas, but McKnight cautions buyers and property owners against automatically assuming an election policy will become law.

“People can propose whatever policies they want to in an election year,” he says. “It doesn’t mean that it’s going to become policy.”

Coalition negotiations, parliamentary numbers and the compromises required to form a government can all substantially alter what ultimately survives beyond the campaign.

Should you wait until after the election?

For buyers and sellers, the historical evidence provides a relatively straightforward message: an election alone is unlikely to transform the property market.

Some purchasers will wait, sales volumes may soften modestly, available stock may build and once the result is known and uncertainty recedes, some of those buyers are likely to return.

But history offers little evidence of a consistent election-induced change in house prices.

That means the more useful questions for homeowners remain personal and financial ones.

For sellers, considerations such as the quality of the property, local supply, competing listings, presentation, pricing strategy and the depth of buyer demand in their particular suburb may prove far more relevant than the date of polling day.

For buyers, mortgage affordability, available stock, personal circumstances and the ability to secure the right property remain critical.

There can even be opportunity in periods when others become cautious. A buyer willing to remain active while a small portion of competitors waits for greater certainty may face less competition. Equally, sellers need to understand that a slightly smaller buyer pool does not mean buyers have disappeared altogether.

Ultimately, elections create headlines, debate and uncertainty. New Zealand’s property market, however, has repeatedly shown that it is influenced by a much wider set of forces.

Because while governments change, property decisions remain deeply personal, and history suggests the market rarely waits for politics to make up its mind.