Election fever hits auction market with sales continuing to slip

AUCTION clearance rates are slipping as the Federal Election looms, property market have noted.

The decline – which saw rates at their lowest since early February – is following a similar pattern seen in previous election cycles.

While the 2,905 auctions represent the busiest number since last October when there were 3,135 homes under the hammer, that volume did not translate into successful sales.

“Buyer demand doesn’t seem to be keeping up,” CoreLogic’s Tim Lawless said.

The preliminary auction clearance rate, slipped to 66.1 per cent – the lowest outcome since the week ending February 2nd, which was the week prior to the Reserve Bank’s rate cut.

“With the election, housing market activity over the following month may be impacted by wary buyers and sellers,” analyst Dr Andrew Wilson said.

Real estate analyst Louis Christopher added that Easter in April and the election the in Easter would see a dampening effect on market activity.

“The listings market is likely to go into a bit of a hiatus for the April public holiday period and will stay that way until after the Federal Election has concluded,” he says.

“Buyers and sellers often take a wait-and-see approach before a Federal Election, as policy uncertainty makes it harder to predict the market.

“Historically, we see a slight dip in clearance rates before an election, followed by a rebound once the results are known.”

Research by Domain suggest that the overall political impact on the housing market is more nuanced.

“The idea that a political party’s victory automatically leads to a stronger property market and improved home ownership rates is an oversimplification,” Domain chief of research Dr Nicola Powell said.

“While elections can affect policy and sentiment, the reality is far more complex than our long-held beliefs suggest.”

Interestingly, Domain’s findings showed that auctions held on election day can achieve higher clearance rates from more committed buyer participation.