Understanding SCP’s election strategy

With more than 25 years’ experience, Southern Cross Partners has seen many elections come and go. This year's election will be the ninth general election since Southern Cross Partners was founded in 1997.

Elections tend to cause uncertainty, as different parties' policies impact us in different ways. As we wait with anticipation for the results, the business world tends to slow right down.

During the 2020 general election we were in the midst of a global pandemic. Lockdowns, social distancing, and working from home were still new to us.

Over that time our stock levels were under pressure, but that had more to do with the large number of loan repayments that occurred once borrowers were able to put their post-Covid exit strategy into action. Regardless, as fast as loans were made available on the portal, they were also being snapped up.

Our pipeline of good quality loans normally increases in the October to December period regardless of any post-election effects. This was still the case in 2020.

What did occur on the loan side after the last election was this:

• Property purchases still happened
• Developers still wanted to buy suitable properties to invest in and develop
• Borrowers still needed to access funds using existing properties as security
• Construction projects still moved forward

What about investors?

SCP investors choose where their funds are invested and the exact first mortgage security that supports that investment. Putting the choice in investors' hands is why we started peer-to-peer investments.

After the 2020 election, some new or inexperienced investors took a wait-and-see approach to remain cautious. Other long-time investors with SCP, and those with more experience in mortgage investing, continued with their investment strategies.

Our strategy for this year 

We all know the wheels of any government move slowly and no sweeping changes to the economy are predicted to take place come Monday 16 October.

While you can never be certain of what the future holds, based on how the last election played out, our prediction is that SCP will continue to receive a steady stream of loans for you to invest in.

Regardless of the outcome, the real estate market, our bread and butter, will almost certainly keep on turning. This allows us to stick with what we know, lending quality security to strong borrowers and offering these to our investors at a competitive rate.

As always, if you have any questions about the loans we have on offer during this time please don’t hesitate to reach out to us at investments@scpartners.co.nz.