Toronto is not a government town. Still, several hundred thousand jobs are tied directly to the three levels of government. It is the seat of the provincial government. There will be both provincial and municipal elections in the coming year.
So, does and election scare the real estate market in Toronto? A good case study would be to take a quick look at Ottawa. In 2015 there was the seventh federal election in the past 18 years. There is a saying that is unique to Ottawa real estate agents: “No one buys in an election year.” Or, “No one sells in an election year.”
We decided to take a look back and see if this held true. With solid data from the mid-90’s onward; started with the 1997 federal election. There were fewer homes sold in Ottawa in the months leading up to the 1997 election than were sold in the same months a year later. This pattern of fewer homes sold in Ottawa before the federal election than were sold in the following non-election year pattern repeated for 2000, 2005 and 2007 elections.
We also know, looking back at the data, that Ottawa too experienced a “down” market for most of a decade from around 1991 to 1998. So, maybe this was all just due to the fact that more homes kept selling every year? To find out, we took the numbers from the year before and the year after for the two elections before 2015… the comparison is startling!
There was a federal election on October 14th 2008. Here are the MLS numbers for sales before that election and compared to the year after the election; as well as, the preceding year:
|Date||July 14 – Aug 14 3 months before election||Aug 14 – Sept 14 2 months before election||Sept 14 – Oct 14 month before election|
|2008 Election yr||1172||1075||940|
There was a federal election on May 2nd 2011. Here are the MLS numbers for sales before that election compared with the year before & after:
|Date||Feb – March 3 months before election||March – April 2 months before election||April – May month before election|
|2011 Election yr||874||1187||1456|
Amazing. The number of homes in Ottawa sold prior to both the 2008 and 20011 federal elections was dramatically reduced when looking at the same time frame the year before or after. In some snapshots there is a 20% difference! On average, there is 8.6% less volume for sold units in an election year. Keep in mind these are sold units, not homes “for sale.” Drive around, you’ll always see plenty of those.
Looking back on the numbers surrounding the most recent 2015 Federal election, we saw the market in Ottawa (and Toronto) once again pick-up steam in months and after the election. Also the stats show that it doesn’t matter who wins, it’s the removal of uncertainty from the market that matters. There are a few elections coming up in 2018. Voters will head to the polls for both the Ontario provincial and Toronto municipal elections. Typically in Toronto, these elections don’t carry as much weight as the federal election does in Ottawa. But, both are in the same year and remember:
“No one makes a move in an election year!”
Not without a great realtor on their side. If you or someone you know is looking to buy or sell, contact us. Our marketing plans, experience and systems for buyers will help you make the right choice. Experience counts!