The question on every seller’s lips with Trump now settled in the White House: is it a good time to sell your home (before the world as we know it comes to an end)?
He’s caused protests through the streets, vilified his own intelligence agency and promised to wage a trade war with one of Australia’s largest trading partners. But will his impact stretch to Australian shores and, in particular, our property market? And if you’re thinking of selling, should you put your house on the market pronto or wait to see what happens?
Nobody knows. But there are a few things you might like to consider:
When the share market becomes volatile (as it has since Trump’s election), many turn to property as a safer investment.
And several experts are predicting continued stock market volatility under Trump’s presidency. If they’re right, this could lead to a property investment surge as investors seek a more stable alternative.
A trade war with China could weaken our financial market, forcing the RBA to cut rates.
In his election campaign, Trump promised to slap 45% tariffs on imported Chinese goods. If he follows through, it may cause a slowdown in Chinese economy, which some believe will, in turn, hurt the Australia economy. If this leads to the RBA cutting interest rates, some of this would pass through to mortgage rates - a plus for many homeowners.
Australia could become a ‘safe haven’ for overseas investors.
If the US becomes financially unstable under Trump, Australia could be seen as a stronger, more robust market by overseas investors with interest flowing through to the property market.
The property market doesn’t respond well to uncertainty.
When the global economic outlook is uncertain, buyers tend to be more cautious. The media is rife with experts all scrabbling to agree what a Trump presidency will mean for Australia. Some are even warning of a global recession. These sorts of headlines cause anxiety, with buyers tightening their wallets as they become unsure what their financial future holds.
Australian banks may be forced to increase their rates & fees.
If International Capital Markets show instability, banks relying on overseas funding for their mortgage books may be forced to increase their rates. However, many experts believe the impact won’t be huge considering Australian banks are in a more secure place now than they were after the GFC.
The world is currently waiting to find out. At the end of the day, Trump is an enigma. We have no past political experience to go by - only his word, which hasn’t so far proved to be altogether reliable. But if he does deliver on his promises to increase jobs and prosperity in the US, Australia can only benefit.
In the meantime, there’s no need to panic. Sell if it suits your current motives, but don’t rush in. Sit back, watch the market and always make informed decisions.