Donald trump – president elect and the Australian property market
It’s difficult to know the extent to which the Australian property market will be affected by this unprecedented result, in the short term it appears to have unsettled investors, with stocks and commodities declining along with world currencies fluctuating. Nervous investors are moving investments into cash and gold as they wait for the shock waves to subside across the financial markets in the wake of global fears of a radically different geopolitical and economic landscape.
The USA is one of Australia’s largest trading partners and is also the second biggest spender on Australian property with over $7 billion worth of applications processed by the Foreign Investment Review Board in 2016. As it is only early days, it is not yet known whether there will be any impact on foreign direct investment into Australia’s real estate sector, however Australia is seen as a safe haven for property investment and with the uncertainty in the equity markets, a low interest rate climate and political uncertainty the climate bodes well for a surge in real estate investment.
The number one location for real estate investment for wealthy Chinese is the USA, however this may change if the financial climate has a significant shift now that the Trump government is in power and with Australia already being the next best choice for Chinese investment we stand to see a further increase in investment interest as a result of the recent election result.
A survey of more than 500 mainland Chinese consumers, conducted by Juwai.com (China's largest international property website for Chinese buyers) just prior to the election, asked which candidate they thought would most likely implement policies that benefit Chinese investors in United States real estate. The results were fairly split down the middle — 54 per cent said Hillary Clinton and 46 per cent said Donald Trump — indicating that Chinese consumers are fairly nonchalant about the election.
The same can be said for US real estate agents who work with international buyers. The results from the more than 400 agents surveyed, showed 55 per cent believe Trump would champion more favourable policies while 45 per cent said Clinton would.
But what could impact Chinese investment is the negative reaction by international markets to the Trump win, rather than is the election itself.
Time will tell once the aftershocks subside and we see the direction taken by investors looking to wealth build in international property.