How will Trump’s win in the US affect our property market?

As the world watched the US election unfold this week, with many dumbfounded as to how the polls could get it so wrong following the announcement of Donald Trump’s surprise win, Australian property experts were busy compiling preliminary thoughts on how the election results may affect our commercial and residential property markets.

LJ Hooker Head of Research, Matthew Tilley shared his educated thoughts and predictions. He said given the fact that almost all parts of the Australian economy are closely linked to the performance of the US, it is important that there is confidence in the future policy direction of the US government and its President Elect, Mr Donald Trump.

Mr Tilley said that while it’s too early to know exactly what the long-term impacts will be on our economy and property markets, the first thing that will be affected (and it has already begun) will be that our equity markets will lose ground. After a dip, the Australian dollar should rise as investors seek a more stable alternative to the US dollar.

In terms of our property markets, inward investment in the US will be seen to be more risky, which will make us a far more attractive proposition to large foreign investors and institutions as well as “high net worth private buyers” interested in buying residential property here. Before the election, New York, Los Angeles and San Francisco were the choice picks of Chinese real estate buyers, who will likely start looking elsewhere, like Australia in the near future.

In summary, Mr Tilley said, “For Australia, the fallout from the election result is all about confidence and sentiment. Buying, selling, investing and consuming are all driven by confidence. The more confident you are with the security of your own income and the destination into which you want to invest, the more you are likely to do so. Therefore, the short term may see investors hold off investing anywhere until things are more certain, however, at the end of the day, this result makes Australia a more attractive, secure and less risky destination for global capital.”

Post by ShelMarkblog 12 Nov 2016 0