The shock generated by Donald Trump’s win at the 2016 United States presidential election is expected to increase demand for Australian prestige property in the short term. Many agents are gearing themselves up for an uptick in inquiries from US nationals.

As for long-term developments, the threat of a trade war between the United States and China could see interest in Australian residential property swing to either extreme, warned Dr. Shane Oliver, chief economist at AMP.

Overnight, Ken Jacobs of Christie’s International fielded email inquiries on prestige properties from buyers based on the east and west coast of the United States.

Times of uncertainty often increase American interest in Aussie real estate. “In the lead-up to this election, the level of inquiry on property from buyers in the US has been building steadily,” said Jacobs. “We expect this to be a repeat of what happened immediately following the 9/11 terrorist attacks in New York. In the aftermath of that, inquiry levels from the US went up 400 per cent.”

Australian real estate does well in times of global uncertainty because the country is seen as a safe place to do business. Plus, it has an economy that isn’t as volatile as many of its neighbours’ as well as a stable government.

“At times like [these], real estate in Melbourne’s blue-blood areas like Toorak and South Yarra are a fairly safe bet among international buyers,” said Hugh Hardy from Melbourne-based agency Abercromby’s Real Estate.

While Melbourne tends to attract a larger proportion of China’s ultra-wealthy house hunters, Sydney tends to do better with investors driven by global jitters because it dominates the broader international trophy market.

Agents are hopeful that if a trade war erupts between the United States and China, this would translate into more investment from China into Australia.

However, Oliver isn’t so certain this will eventuate. “Yes, the relocation effect from Trump’s electoral win could be good news for the top end of the market from the US and as capital outflows from China are diverted from the US to Australia,” he said.

“But the flipside is that a trade war that drags Australia into a recession and impacts adversely on our share market would see a big drag on our broader property market.”

 

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