How has the Australia property market changed since the 2019 election? Is the market freeze over?
For those of us in the NSW Residential Property industry, the first six-months of 2019 will go down as some of the harshest market trading conditions in the Residential space in NSW since the GFC. The first half of 2019 brought with it; the conclusion of the Royal Commission into Banking and Finance, both State and Federal Elections – and a dire purchaser market, with restricted lending conditions – along with a barrage of media coverage, printed almost daily – in big black letters, the doom and gloom of buying property in this state.
It seemed like the market was in a freeze frame. No level of marketing, incentives or even price adjustments by many projects and agents across the market seemed to unfreeze us.
With the constant discussion around the big three market distractions of 2019; and as each one fell away, we got closer and closer to the turning point. By March, both sides of politics had determined that they would not implement many of the recommendations from the Banking Royal Commissions findings that might impact our market. Within the same month the State Election concluded. In April there was respite on lending conditions, with a Big Four Banking committing again to Interest Only mortgages – and it was in May, that the freeze began to thaw, with the conclusion of the Federal election; and the political alignment of both state and national, Liberal Governments.
“We certainly breathed a sigh of relief almost immediately after the Federal Election outcome, as did much of the business community across the country” said Dennis Vertzayias, National Director, and Head of NSW Residential Project Marketing.
The markets certainly reacted the same way, and we saw an immediate rally in the share market and a resurgence of confidence, across the business community. “I was particularly interested, what impact, if any – the election outcome and the finalisation of “those” distractions would have to the Residential Market so I was watching very closely.” According to Dennis Vertzayias “the shift in purchaser sentiment was almost immediate, I signed more sales advices and we issued more sales contracts in that first week following the election – than we had done in the entire month, proceeding the Federal Election.” And these numbers have remained consistent since!
According to internal Colliers International data – the rate of enquiry in the week leading up to the Federal Election, across the Residential business in Sydney was 132 enquiries; and in the week proceeding this number grew to 233 enquiries. In the month following the election we experienced a 60% increase in enquiry compared to the month prior.
More important, the number of our buyer interactions (meaning; face to face contact, between purchasers and agent on the ground) increased from 63 interactions in the week leading up to the election, and 93 the week proceeding. In the month following the election across our business we experienced a 60% increase in buyer interactions, compared to the month prior.
Subsequently, using figures provided by Domain.com.au of search traffic of the month leading up too, and the week after the Federal election an increase of market activity is visible. According to the data from Domain Groups Homepass app, which shows the number of Open home attendees – the average number of check-ins per listing Australia-wide jumped 11 per cent, the week after the election – when viewing just NSW date this increase was even more dramatic at 18 per cent. 
Interestingly, the increases we experienced at Colliers International were reflected across our entire inventory - including affordable stock through to higher-end sales. We sold three apartments between $2-$3million each, within a four week period following the Election in different areas of Sydney, and we simply haven’t seen this pattern in the first half of the year. Overall we have experienced a 152% increase in sales from the month prior, to the month following the Federal Election.
There is no question that an improvement in sentiment, confidence and transactions has been clearly evident since the Federal election. We are also seeing a resurgence in developers’ confidence and willingness to launch new projects to market. Colliers International have four such projects, earmarked to launch within the next 3-months – located in Sydney's West, South as well as in the Inner West and the Lower North Shore.
Naturally, there remains some weakness of the greater economy, retail spending is down – and the big number to watch now is the Australian dollar and unemployment. For the most part we are confident that the second half of this year will see stability, confidence and a resurgence in market activity. We have not seen a shift in pricing yet, and in fact we do not expect to see any movement in price until demand outstrips current supply – expected in late 2020.