BY MARILYN WILSON, THE OTTAWA CITIZEN October 15, 2015Each time a federal election rolls around, the real estate market is fraught with indecision. Buyers can hold their purchasing power close to the vest like chess players waiting to make the winning move.
I had a few experts weigh in on the effects the federal election has on the condo market.
“It is a challenge teasing out the impacts of the federal election, compared to the general market conditions,” says Rodney Wilts, partner at Windmill Developments. “Our projects have continued to sell at a steady pace, including to civil servants. I do expect that there are some sitting on the sidelines until they see the outcome of the election and gauge any potential impact, and we should see a little bump next spring when those tentative buyers jump back into the market.”
Doug Casey, owner of Charlesfort Development, agrees. “Generally when there is an election, activity drops off due to a perceived uncertainty.”
But the question remains, why are buyers so cautious? What effect could an election have on their buying potential?
My husband, Allan Wilson, currently works in biotech but was previously professor of psychiatry at the University of Ottawa. I asked him to explain this waiting-to-buy phenomenon from a psychological perspective.
“People get more anxious in anticipation of any event that involves uncertainty, such as an election with its implication (real or imagined) for the economy. As a way of reducing their anxiety, they delay making stressful decisions if at all possible.
“This will impact any discretionary spending, including a home purchase if a move is not absolutely necessary. It also takes a while after the election for consumer confidence to return.”
Seeking a technical answer for why some people want to hold off on buying, I turned to Canada Mortgage and Housing Corporation, however, they do not use elections as a housing market assessment parameter.
Though there may not be a specific measurement of this phenomenon, elections certainly have an influence on the market, especially in our government-centric city. Perhaps in cities such as Vancouver and Halifax, where there are fewer government jobs, spenders would be less cautious. Yet in Ottawa we are finding they are cautious across categories where they can hold off on discretionary spending, including condo purchases.
On the political side, James Baxter, editor and publisher of iPolitics, also weighed on the discussion.
“Some politicos and senior bureaucrats will use the occasion — particularly if it results in a change of government — to leave for new jobs in business centres and university towns. But it’s hard to imagine any new government making more cuts to the public service, so — at least in theory — there should be some increased demand for housing in the National Capital Region.”
As we go into next week and voting day comes and goes, we look forward to buyers’ confidence increasing.
Marilyn Wilson has been selling real estate for more than 25 years and owns Marilyn Wilson Dream Properties Inc. Brokerage, an Exclusive Affiliate of Christie’s International Real Estate. She can be reached through dreamproperties.com.