Key takeaways
A lot of people are wondering how the upcoming federal election will affect our housing markets.
While uncertainty can impact buyer confidence, elections are just one of many factors.
Other influences include interest rate changes, economic instability, and media speculation.
Some buyers pause, but others take advantage of reduced competition, keeping transaction volumes relatively stable.
Analysis of the past seven federal elections shows no major impact on property sales.
Auction numbers fall by 50% on election day, mostly due to fears that buyers will be too distracted by voting.
Election day auctions achieve a higher clearance rate (60.4%) than surrounding weekends.
Domain’s data shows no strong link between a party’s leadership and property price growth.
Every time an election rolls around, we hear the same predictions—buyers will put their plans on hold, auctions will flop, and the winning party will determine whether property prices boom or bust.
But is that really the case?
Domain has just released a report busting some of the biggest myths about the impact of federal elections on the property market, and the findings might surprise you.
Myth 1: Political uncertainty makes people delay buying
One of the biggest beliefs is that political uncertainty makes buyers and sellers hesitant, causing a noticeable dip in transactions.
And to some extent, that’s true—uncertainty can erode confidence in any financial market, including property.
Domain’s analysis found that a rise in Australia’s Economic Policy Uncertainty Index (EPU) is linked to fewer home sales.
Specifically:
- A 1-point increase in the uncertainty index correlates with 8.08 fewer property transactions.
- A 100-point spike in the index could mean 808 fewer sales in a month.
- Australia’s EPU hit 261.6 in February 2025—a two-year high, suggesting political turbulence can influence short-term activity.
But here’s the important part: uncertainty is not exclusive to elections.
- Market confidence can drop due to interest rate hikes, global economic instability, or even media speculation—not just political campaigns.
- While some buyers pause during election periods, others take advantage of less competition, meaning total transaction volumes don’t actually collapse.
Note: Yes, uncertainty can slow buyer activity, but elections aren’t the sole culprit—it’s just one of many moving parts in the market.
Myth 2: Elections directly slow down home buying
If political uncertainty was a major factor, we’d expect property transactions to drop in the months surrounding an election.
Yet, Domain’s analysis of the past seven federal elections shows no statistically significant impact on property sales:
- Sales before, during, and after an election remain broadly stable.
- In some cases, sales even increase slightly in the lead-up to an election.
- Buyers are primarily influenced by personal factors (job changes, family needs, financial stability) rather than election results.
Why doesn’t an election slow down home buying?
Because, unlike investors who may react to political shifts, homebuyers purchase based on their life stage, not the political calendar.
Note: If you’re ready to buy a home, waiting for the election outcome likely won’t change your financial situation.
Myth 3: Sellers avoid holding auctions on Election Day
This one is actually true, but not for the reasons you might think.
Domain's report shows that:
- Auction volumes plummet by 50% on election day compared to the previous Saturday.
- The weekend before an election, auction volumes average 1,568 nationwide.
- On election day itself? That number drops to just 789.
Why do sellers avoid election day?
- Many believe potential buyers will be too busy voting to attend auctions.
- They assume that buyer turnout will be weaker, reducing competition.
- They prefer to delay by a week, believing conditions will improve.
But are they right?
Well, the next myth might surprise you.
Myth 4: Auctions held on Election Day perform worse
This is where the data challenges conventional wisdom.
Domain found that auctions held on election day actually achieve higher clearance rates than those on surrounding weekends:
- Election day auctions: 60.4% clearance rate
- The Saturday before: 59.5%
- The Saturday after: 59.8%
Why would election day auctions perform better?
- With fewer auctions happening, serious buyers face less competition.
- Those who attend are often more motivated and prepared to bid.
- Some sellers benefit from reduced auction supply, leading to stronger results.
This suggests that sellers who avoid election day might actually be missing an opportunity.
[note] Takeaway: While fewer auctions take place on election day, those that go ahead tend to attract committed buyers, often leading to strong results. [/notes]
Myth 5: A Party’s victory determines property market performance
One of the biggest myths is that a change in government will directly impact property prices.
But does history support this claim?
Domain’s analysis found no clear evidence that one party consistently drives stronger market growth.
However, some trends are worth noting:
- House prices grew slightly faster under Liberal governments, with an average annual growth rate of 3.1% (compared to 2.9% under Labor).
- Unit prices grew faster under Labor governments, averaging 4.5% annually (compared to just 1.4% under Liberal leadership).
- First-home buyer activity was higher under Labor, with 34.4% of loans going to first-time buyers (compared to 30.5% under Liberal governments).
But before jumping to conclusions, consider this:
- These numbers don’t account for broader economic forces like interest rates, inflation, or global financial conditions—which have a much bigger impact on housing than who’s in office.
- The massive property boom between 2019 and 2022 (during a Liberal government) skews these figures—without that period, growth rates are almost identical under both parties.
[note] While policies may influence affordability and supply, overall market movements are driven by broader economic forces—not just election outcomes. [/notes]
What this means for buyers, sellers, and investors
If history tells us anything, it’s that elections are more about perception than actual impact when it comes to real estate.
- For buyers: Don’t let election uncertainty hold you back. The market keeps moving regardless of who wins, and interest rates and affordability matter more than politics.
- For sellers: If you’re worried about election day, know that clearance rates tend to be higher, meaning fewer auctions can sometimes work in your favour.
- For investors: Long-term market fundamentals—population growth, supply constraints, and borrowing costs matter far more than political cycles. Smart investors focus on big-picture trends, not short-term election noise.
The key lesson?
Property markets operate in cycles, while governments come and go.
So, don’t base your property decisions on election hype.
As I always say, focus on the fundamentals, and you’ll be well ahead of the game, no matter who’s in power.
