​Sometimes, what appears to be a massive change is actually more evolutionary than revolutionary.

The new Government came in last year with a hiss and a roar, banning foreign buyers, promising migration cuts, reversing tax cuts and arguing it had discovered massive infrastructure deficits that needed fixing. It announced big increases in the minimum wage and a families package that boosted low incomes substantially and pledged to reverse nine years of employment law changes.

​It also put its own choice in as Reserve Bank Governor and changed the foundation of monetary policy to a dual mandate that took employment into account as well as inflation. These all sound like massive changes, but now we have the first round of reporting milestones on both monetary and fiscal policy to assess just how much has changed. ​​The Reserve Bank published its first Monetary Policy Statement under new Governor Adrian Orr on May 10 and Finance Minister Grant Robertson unveiled his first full Budget on May 17. 

Property investors and first home buyers who are fearing or hoping a surge of new housing supply should know it will be very hard for the Government to engineer. Bernard Hickey charts the heavy headwinds buffeting Kiwibuild.

Housing and Transport Minister Phil Twyford is arguably the most important and pressured man in the new Government.

He is responsible not just for creating the Kiwibuild programme to build 100,000 affordable houses in 10 years. He will also have to conjure up a massive transport investment programme that New Zealand’s governments (both central and local) are ill-equiped to finance.

The last four months in politics has been like nothing we’ve seen this decade and has thrown up one almighty surprise that has implications for the housing market.

The new Government is set to try to restrict foreign buying and migration while ramping up supply of houses and apartments that cost less than $600,000.

​New Zealand’s new Labour-New Zealand First coalition Government with Green support was sworn in last week and held its first cabinet meeting on Tuesday. As recently as early October, most gamblers had their money on National returning for a fourth term with the support of New Zealand First. The result on election night looked more like a victory for Bill English than anyone else. As recently as early June the National Government looked to be a shoe-in for a record fourth term under MMP. 

The housing market, along with the rest of the economy, is on tenterhooks to find out who will lead the next Government and what sort of policy changes can be extracted by ‘Kingmaker’ Winston Peters.

Home buyers and borrowers will need to keep an eye on whether those policy extractions include; sharply lower migration, a foreign buyers’ ban or stamp duty, massive new house building programmes, new subsidies for first home buyers, and a banking inquiry – all of which Peters has proposed.

​Peters began preliminary negotiations to form a Government this week, speaking first to Bill English and his team for just 30 minutes on Thursday, before having an afternoon chat with Jacinda Ardern. The talks will begin in earnest on Saturday afternoon once the results of 322,697 special votes lodged in New Zealand are counted. These includes votes from young unenrolled voters who enrolled and voted at polling booths before election day. Over 1.2 million people voted early, almost double that seen in the last election. 

Suddenly, everyone is talking about politics and what a potential change of government might mean for the housing market.

​Sales activity continued to cool through July and August and prices are flat to slightly down in Auckland and its surrounds. Many are now waiting for the September 23 election result for certainty on housing policy, which is similar to what was seen in the market before the September 20, 2014 election result.

​A John-Key-led National appeared to have won an outright majority for a third consecutive term on that night in 2014, sparking a surge in activity in open homes and auction rooms over the following weeks. Prices rose 30 percent in Auckland over the following two years as fears about Labour’s Capital Gains Tax and New Zealand First’s foreign buyers ban receded from the market.