This year’s federal election could have a negative impact on the housing market, according to some economists.
A new report by business research and forecasting group BIS Shrapnel says property values in Sydney are likely to jump 6% after the election, while Brisbane will experience an 8% rise.
However, BIS has downgraded its growth forecasts for 2013, saying the timing of the election could result in a slump.
In an interview with The Australian reporters Sarah Danckert and Nick Leys, BIS managing director Robert Mellor says that, once sentiment turns, it’s possible for things to get worse in the short term.
“Some markets could record no growth or growth below the rate of inflation.”
Mellor says the Gillard government and the opposition would have “limited capacity” to announce spending programs during the campaign and would likely resort to “talking down” the economy in order to calm nervous voters – something which Mellor says would make the election timing a key factor in limiting the impact it will have on prices.
“The critical thing will be how we go in the first two or three months of the year. If we get into an election mode early but the election is not going to be held until September or November, then that will not be a healthy thing for the market.”
BIS predicts that many buyers will wait to see if a new stimulus is offered by either party and says markets that are already lagging are the most likely to be affected by the election.
Dwelling prices in Melbourne fell 7% in the year to June, 2012, according to BIS reports and could plunge a further 2% over the year to June, 2013. Adelaide and Hobart, which BIS predicts will fall 1% and 4% respectively in the year to June, are also likely to feel the effects.