Once the shock of a Trump presidency in the US wore off and the markets (stocks, precious metals et al) settled down, the movers and shakers of the property market in Australia started giving their own predictions regarding the impact of the historic US presidential election to the property market in Australia.
“Nearly all parts of the Australian economy are intrinsically linked to the performance of the US; our equity markets take their direction from the US, and the Australian dollar is impacted by the strength of the US economy. It’s therefore important that there is confidence in the future policy direction of the US government and that of the president” claimed LJ Hooker’s Head of Research, Mathew Tiller.
Taking the above into consideration, we may deduce that a Trump presidency would inject new life into the Australian property market. However, the crucial question is that no one really knows what Donald Trump is going to do – in fact, he probably doesn’t know himself.
What we do know however, is his electoral slogan of making “America Great Again” and his life as a businessman and real estate tycoon. Amongst the plethora of economical policies that Trump announced, some of them stand out.
- He wants major infrastructure development to boost the national economy as well as industrial output while simultaneously decreasing interest rates to get more and more Americans to spend their money rather than saving it.
- He is also an outspoken critic of free trade agreements and wants the US to renounce quite a few.
Regarding his foreign policy initiatives, what little is known is centred on a more ‘hands off and isolationist approach’. All of this combined may just mean an economic boom. And since the US is the second-biggest foreign investor in Australian property, with $7.1 billion worth of applications approved by FIRB in 2016, the chances are these investments would simply increase in the foreseeable future.
Add to that the fact that his xenophobic comments had led to the Canadian immigration website crashing for almost an entire day. While both New Zealand and Australian Immigration websites also showed a massive increase in traffic with many wealthy Amaricans expressing an interest to shift to these countries rather than live though a Trump presidency. Trump’s resounding victory both at the White house and in Congress may be a portend for many foreign investors who are more than likely to focus more intensely on safe havens such as the Australian property market.
This is primarily due to the fact that for many investors not just in the USA but also other parts of the world, the Australian real estate market is widely perceived to be one of the safest investments anywhere on the globe.
If US property market values decline (a distinct possibility as many Americans look for greener pastures), odds are that the property values in Australia may benefit from this phenomenon both in the short as well as medium terms.
