Loan pre-approvals by banks can be confusing. They aren't a rubber stamp to buy whatever you want, but some buyers are being a little too cautious.
Does a change in Federal government influence the property market?
It's election day. The campaigning is done and it's up to us, the voters, to cast our vote and choose the government for the next three years or so.
A much asked question over recent weeks has been: "Will a change of government impact the property market?"
That's a difficult question to answer. But we've taken a look at the results of every Federal election since 1972 and compared that to the percentage change in Melbourne median prices in the following year, using REIV figures. The following table compares the performance when an election brought about a change in government with those elections when there was no change.
|Change of Government||No change of government|
|Nov-07||10.6% (2008) Rudd||Aug-10||1.6% (2011)|
|Mar-96||13.3% (1997) Howard||Oct-04||-1.4% (2005)|
|Nov-83||16.7% (1984) Hawke||Nov-01||13.5% (2002)|
|Dec-75||28.1% (1976) Fraser||Oct-98||14.4% (1999)|
|Dec-72||36.6% (1973) Whitlam||Mar-93||-3.5% (1994)|
|Figures taken at the end||Jul-87||17.5% (1998)|
|of the June quarter||Dec-84||15.8% (1985)|
The table shows that a change in government has, since the 1970s at least, always been followed by strong capital growth the next year. However, for the 11 elections where there has been no change in government, there have been five occasions of strong growth, two occasions where growth has been moderate, and four instances where growth has been weak or slightly negative.
In short, history shows that there isn't a significant difference in property performance between occasions when elections lead to a change of government and when they don't.
Don't forget to vote!