By David Hargreaves
Timing is everything.
And some of the timing around decisions ultimately affecting the housing market is not looking great at the moment.
It is anybody's guess when we will get a government sworn in and up and running.
What's rather more predictable is that Christmas and the end of the year are both approaching with great speed.
Even if the shape of the next government is settled this week, it's very questionable how much can now be achieved before Parliament goes into recess in December.
Given the delays that have occurred since the September 23 election, would our MPs consider staying on in Parliament for longer than usual this year to get the new government up and running?
Well, you can argue that maybe they should. But I wouldn't bet on it.
The interesting thing then will be priorities and what things logistically the new government will attempt to tick off - and what is physically possible before the end of the year.
The portents in all this are maybe not good for the housing market.
At the moment obviously uncertainty rules. Anecdotally the banks' lending policies are getting tighter and tighter - possibly in some part due to the uncertainty.
The latest iteration of the Reserve Bank's LVR restrictions - the 40% deposit rule for investors - is still seemingly having an impact too.
We are just at the point when the question is worth seriously asking about whether the RBNZ should now be considering backing off with the LVRs.
LVRs a blunt instrument
I would imagine the RBNZ itself is still pretty happy with how things are at the moment. But LVRs are a somewhat blunt instrument - and there would be a risk in the restrictions going on for too long in their current form.
However, the RBNZ's probably reluctant to look at lifting them without further back-up insurance. Of course, it is still keen on debt-to-income ratios, but the National Government effectively pushed that down the road and beyond the election through getting the RBNZ to consult on it first before any agreement was considered for including it as one of the options in the 'macro-prudential toolkit'.
Separately both Prime Minister Bill English and Labour leader Jacinda Ardern later poured cold water on the idea of DTIs. And indeed it's possible depending on the hue of the future government that there may be a push-back against the RBNZ's use of macro-prudential tools.
Also, there's the possibility the RBNZ's Policy Targets Agreement with the Government may be reworked - potentially removing inflation as the sole target of monetary policy and adopting a broader focus.
And, whoever forms the Government, it's likely that some move towards a formalised committee process for interest rate decisions will be established. Such a process has informally been in place at the RBNZ in recent times - but officially the decision is still that of the Governor and the Governor alone.
A new Governor would be good
All these kinds of issues will be occupying the mind and thoughts of the new RBNZ Governor. Oh, and that's right, we haven't got one of those yet.
It will be up to the new Government to sign off on a new Governor to replace Graeme Wheeler, who left in September.
The previous Deputy Governor Grant Spencer stepped up to the plate as Acting Governor for a six month term that will expire in late March.
Under Spencer then a steady-as-she-goes course can be expected. But it's difficult to see much inclination on his part to undertake substantial new initiatives - certainly not till there's a new Government in place and some indication when a new RBNZ Governor will be appointed.
What then if the Government doesn't get around to appointing a new Governor before the end of the year?
Well, that could be pretty interesting to say the least.
If a Government was up and running by the start of November and able to swiftly appoint a new Governor, then it's to be imagined said Governor may well still be able to take up their appointment by the time Spencer is leaving in late March. It does of course depend whether the appointment is internal or external.
A bit fraught
But leave a decision till after Christmas and things are likely to get a bit fraught. It's to be imagined that a lot of the decisions that will need to be made by a new Governor simply won't be able to be addressed.
Within all that then is what happens to the housing market.
With the uncertainty still hovering around who will govern the country, it seems we can now definitely kiss goodbye to any prospect of a meaningful rally in the market before Christmas.
After the 2014 election, when the status quo was returned to Government, the housing market exploded in the run-up to Christmas.
That would not have happened this year in any case, given the LVR restrictions on investors and the conservative line being taken by banks to new lending.
A quiet housing market
But the probability, with the way things have panned out, is that the market's now going to be real quiet up to Christmas and therefore, real quiet till probably March.
I think there is a risk that with the RBNZ not having permanent new leadership in place, and not even knowing properly what rules it will be having to abide by under a new Government, that the currently very tight regime on the housing market will be left in place for too long.
Now, with the market as it is at the moment, we are some way off (I would have thought) any suggestion of investors feeling pressured to sell properties. But if interest rates do, partly based on uncertainty, start to push up again in the new year, will this be a trigger for more investors to look to offload properties.
The risk then would be that the LVR policy - designed to stop sharp corrections in the market that might put banks under pressure - could actually lead to such a scenario.
Food for thought
I don't want to be alarmist. But I just hope people are thinking about these things.
The housing market looks fairly balanced at the moment and could probably tip either way.
It needs vigilance and responsiveness from the powers-that-be. With no Government and no permanent RBNZ Governor this is a far from ideal situation.
Whenever a new Government is formed, it is to be hoped that things like the new RBNZ Governor and the Policy Targets Agreement are given urgent priority.
Otherwise there is some potential for matters in the housing market to get away from us.