{"id":342779,"date":"2024-10-07T14:00:48","date_gmt":"2024-10-07T18:00:48","guid":{"rendered":"https:\/\/www.sothebysrealty.com\/blog-api\/?p=342779"},"modified":"2024-10-07T14:00:48","modified_gmt":"2024-10-07T18:00:48","slug":"the-fate-of-real-estate-in-an-election-year","status":"publish","type":"post","link":"https:\/\/www.sothebysrealty.com\/extraordinary-living-blog\/the-fate-of-real-estate-in-an-election-year\/","title":{"rendered":"The Fate of Real Estate in an Election Year"},"content":{"rendered":"

More than half of the world\u2019s population go to the polls in national elections this year. How does political change affect real estate markets?<\/span><\/h2>\n

\"\"<\/a>A view of the Kennedy Center from the Residences at Ritz Carlton Georgetown in Washington, D.C.<\/a> Photo: TTR Sotheby\u2019s International Realty<\/span><\/i><\/p>\n

This year marks an unprecedented wave of national elections across the globe. According to Reuters and The Economist, about half of the world\u2019s voting-age population\u2014over four billion people spanning nearly 80 countries that collectively account for more than 60% of global GDP\u2014are eligible to cast their ballots in what Time magazine has dubbed \u201cthe ultimate election year.\u201d\u00a0<\/span><\/p>\n

The most closely watched election is in the U.S., the world\u2019s largest economy and third-largest nation by population, which will elect its next president in November 2024. The Democratic and Republican party platforms\u2019 approaches to real estate are starkly different, from tax credits and down-payment assistance to low-regulation policies.\u00a0<\/span><\/p>\n

\u201cThe U.S. 2024 presidential election represents a critical moment for investors and financial analysts around the world\u2014with the potential to have an impact on several areas, from economic policies to specific markets, the outcome could shape the global economic future,\u201d says Renata Victorino, director, Bossa Nova Sotheby\u2019s International Realty in S\u00e3o Paulo, Brazil. Victorino and her colleagues in South America are keeping a keen eye on what is happening in the U.S., even as municipal elections take place in Brazil in October to decide the leaders in more than 5,000 cities and towns across the country. Meanwhile, in other areas of the world, India\u2014the largest nation by population\u2014held its massive six-week general election process between April and June 2024, resulting in a coalition government led by prime minister Narendra Modi. Voting for the parliament of the 27-member European Union also took place in June.<\/span><\/p>\n

\"\"<\/a>This home in Austin, Texas<\/a>, sits on the coveted location of Lake Austin. Photo: Kuper Sotheby\u2019s International Realty<\/span><\/i><\/p>\n

\u201cHistorically, the housing market tends to experience a slowdown in activity during presidential election years,\u201d according to a report issued by the Nationwide Mortgage Bankers in March 2024. \u201cThis trend is particularly noticeable in the months leading up to the election as individuals prioritize political developments over real estate decisions.\u201d<\/span><\/p>\n

\u201cEvery election year the market softens,\u201d says Claire Reynolds, managing partner, United Kingdom Sotheby\u2019s International Realty in London, who has been involved in luxury property sales for two decades. \u201cUncertainty can create a wait-and-watch attitude, resulting in a market with temporarily subdued growth.\u201d\u00a0<\/span><\/p>\n

Christie-Anne Weiss, global advisor, TTR Sotheby\u2019s International Realty, Washington, D.C., who has more than 40 years\u2019 experience in navigating the market during presidential elections, agrees. \u201cFrom my experience, what we see again and again is that our market gets quieter around October,\u201d the month before Election Day, she says. \u201cOnce the election is over and we know who the president is, business will resume as normal. It is buyer psychology; people do not make major investment decisions when there is imminent uncertainty.\u201d<\/span><\/p>\n

\"\"<\/a>A stunning <\/span><\/i>150-year-old home in North Goa<\/span><\/i><\/a>, India, where there were elections in spring 2024. Photo: India Sotheby\u2019s International Realty<\/span><\/i><\/p>\n

This effect spans the world. Pre-election uncertainty \u201cslows down housing sales, specifically in metro markets, and impacts stock market activity, especially if a coalition government looks like it\u2019s coming into power,\u201d says Ashwin Chadha, chief executive officer, India Sotheby\u2019s International Realty.\u00a0<\/span><\/p>\n

A sense of political stability, on the other hand, can have an unsurprisingly positive effect. Since India\u2019s incumbent Bharatiya Janata Party (BJP) has held onto power in this year\u2019s elections, the real estate market is likely to benefit. \u201cThe current government has reiterated its intentions for high spending, drawing in investments to boost the manufacturing sector,\u201d adds Chadha. \u201cBoth infrastructure spending and manufacturing augur positively for the property market, including luxury real estate.\u201d\u00a0<\/span><\/p>\n

In the U.K., meanwhile, the Conservative and Labour parties went head-to-head in a general election on July 4, with the Labour party winning by a clear majority. \u201cThe recent elections offer an opportunity for change. Against the backdrop of an optimistic interest rates outlook, housing plays a big part of the new government\u2019s manifesto,\u201d says Reynolds. \u201cOnly 18% of buyers [in central London] are purchasing their main home, 54% are purchasing a second home, and the other 28% are buying for investment,\u201d Reynolds adds, citing statistics gathered by her firm. \u201cInternational investment is hugely vital for the prime central London market, with the three most dominant groups of buyers being from the U.S., the Middle East, and China.\u201d<\/span><\/p>\n

\"\"<\/a>This <\/span><\/i>11-bedroom house in central London<\/span><\/i><\/a> offers spaciousness that is rarely found in the city. Elections in the U.K. took place in July 2024. Photo: United Kingdom Sotheby\u2019s International Realty<\/span><\/i><\/p>\n

While real estate agents are watching their own local elections closely, the property market is highly interconnected globally, so they have an eye on other elections as well, and the U.S. election looms the largest. Chadha recognizes concerns from abroad. \u201cThere are always risks,\u201d he says. Internationally, a slowdown in the U.S. could have \u201ca cascading effect on foreign investment.\u201d But Victorino points out that \u201cinvestment in the real estate market is one of the most stable, and the easiest to recover, even in unstable scenarios.\u201d\u00a0<\/span><\/p>\n

\u201cAn uncertain market can present good opportunities for those with an appetite for higher-risk investments, or those who take a longer-term view,\u201d says Reynolds. \u201cFor those taking a five-year or longer view, we\u2019re forecasting good growth.\u201d\u00a0<\/span><\/p>\n

Read the <\/span><\/i>full version of this story<\/span><\/i><\/a> in the 2024 Mid-Year Luxury Outlook Report<\/span><\/i><\/p>\n

\"\"<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

More than half of the world\u2019s population go to the polls in national elections this year. How does political change affect real estate markets? A view of the Kennedy Center from the Residences at Ritz Carlton Georgetown in Washington, D.C. Photo: TTR Sotheby\u2019s International Realty This year marks an unprecedented wave of national elections across […]<\/p>\n","protected":false},"author":64295786,"featured_media":342780,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_crdt_document":"","advanced_seo_description":"","jetpack_seo_html_title":"","jetpack_seo_noindex":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[1395,1403],"tags":[1437,1450,1498,1505,1510],"class_list":["post-342779","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-brand-news","category-market-insights","tag-england","tag-india","tag-texas","tag-united-kingdom","tag-washington-dc"],"jetpack_featured_media_url":"","jetpack_likes_enabled":false,"jetpack_shortlink":"https:\/\/wp.me\/pf4gbL-1raH","jetpack-related-posts":[{"id":342144,"url":"https:\/\/www.sothebysrealty.com\/extraordinary-living-blog\/introducing-the-2024-mid-year-luxury-outlook-report\/","url_meta":{"origin":342779,"position":0},"title":"Introducing the 2024 Mid-Year Luxury Outlook Report","author":"SIR Admin","date":"July 10, 2024","format":false,"excerpt":"Today,\u00a0Sotheby's International Realty published\u00a0the next iteration of the brand\u2019s coveted Luxury Outlook\u2120 report. 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