Confidence dips before polling day, but spending and hiring hold up
ASB analysis of seven NZ elections finds uncertainty hits sentiment but rarely slows investment, hiring or spending, with no post-election rebound
Borrowers and businesses waiting for the election to pass before making big decisions may be the exception rather than the rule, according to new analysis from ASB.
Economists Wesley Tanuvasa and Mark Smith (pictured left to right) studied the seven general elections between 2005 and 2023 and found little sign of the post-election catch-up that would follow if activity were genuinely being put on hold. As the pair put it, “New Zealanders just seem to get on with it.”
Housing shows no clear election effect
For the property market, ASB found no clear difference in house prices or sales between the year before and the year after polling day, with prices generally resilient across the sample.
The wider economy told a similar story. Across 42 comparisons (six measures over seven elections), post-election growth was higher in only 17. Average annual GDP growth slowed from 2% before an election to 1.5% after, while consumption growth eased from 2.9% to 1.9%. Tanuvasa and Smith noted their analysis is descriptive and does not adjust for the business cycle or other shocks.
Confidence surveys typically softened in the 12 months before a vote, yet business investment still grew ahead of five of the seven elections and employment generally kept rising.
“However, there looks to be a disconnect between what people say they will do and what they end up doing,” they wrote.
The GFC and COVID-19, rather than the elections, were more likely behind the investment falls around 2008 and 2020. The 2023 election broke the usual pattern, with confidence running well ahead of activity, which ASB partly attributed to an economy still working through post-pandemic overheating.
Global risks loom larger in 2026
ASB sees international factors as the bigger near-term threat, including the US-Iran conflict, reduced oil refinery capacity, and the US midterms, held less than a week before New Zealanders vote on 7 November.
The bank acknowledged this year’s race looks tight, with a range of possible coalitions and policy outcomes that could make waiting more appealing.
In the property market, some buyers appear to be doing just that. Mortgage advisers in September cited the approaching election as one factor keeping investors out, and independent economist Tony Alexander’s latest NZHL Property Report found a net 46% of agents still seeing fewer landlords looking to buy.
Even so, ASB suggested the election’s pull on decisions may be overstated.
“Election-related uncertainty may be receiving disproportionate weight because it is salient, rather than because it is materially constraining activity,” the economists said.
Read ASB's full Economic Note.
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