By James MacSmith
Democrat Joe Biden’s win in the US election is set to have a significant effect upon our property market leading industry figure say, with one group as standout winners.
The certainty America and the globe now have about the next president in the White House is set to create a flow-on to Australia and other countries, who often take the lead from the world’s greatest economy.
“Democracy is a wonderful thing, the American people have spoken, the battle is now over and we get on with business, First National Real Estate CEO Ray Ellis said.
“Our economy is strong, we have just enjoyed 33 successive months of trade surplus, interest rates are at record lows and will be for the next three to four years. So this is what Australians will be concentrating on.
“We have always had a great trade relationship with the US and that will continue but the real issue for our market is the impact of COVID-19.
“With travel curtailed, so too will be the activity on our real estate market created from ex-pats returning and immigration and that is a fair percentage.
“However first home buyers have come back into the market with great enthusiasm and that will continue now. That sector of the market recognises the opportunity there for them.
“It won’t replace the activity that immigration and ex-pats bring but it will greatly cushion it.”
Mr Ellis also predicted Aussies will continue to expand on their homes, with Australia having successfully dealt with the pandemic while many other countries continue to grapple with its health issues.
“Australian houses have become bigger and bigger over the past 30 years,” he said.
“We have gone from wanting a pool to also wanting a home office and a home theatre.”
According to research released yesterday, Australians now have the biggest houses in the world.
Eddie Law, Chief Executive of McGrath Estate Agents, believes that Mr Biden winning the US election will be well received in Australia and internationally.
“As global markets digest a change in direction for the US Presidency, Biden’s win will have a stabilising effect on today’s economic outlook which in turn will encourage confidence amongst potential property buyers,” he said.
“Stockmarkets both in Australia and globally will no doubt reflect the same sentiment, and hence show moderate growth that will impact the personal wealth of many investors with share portfolios.
“Australian markets are correlated with US markets, and the positive impact on personal wealth will no doubt transpose to an increased consumer confidence particularly for those likely to participate in the Australian housing sector. Importantly, global liquidity will prevail and coupled with political certainty, will mean interest rates will remain lower for a longer period. With these factors at play, Australians will remain confident to take on a mortgage to purchase property.
Mr Law also predicted that the Biden administration would most likely prove more conciliatory in terms of international relations and be less controversial overall with China. “This may impact Australia’s own diplomacy going forward, and pave the way to resume both travel and trade. This would definitely prove positive for the demand side of the Australian property sector.”
The Agency CEO Matt Lahood predicted an optimistic outcome.
“The whole world, including Australia, has been closely watching the US election. This is because US policy and its economic performance have a material impact on other economies around the world. The fact a result has been announced creates a level of certainty and hence stability. Certainty and stability are two factors that affect consumer confidence and as a result the property market,” he said.
“Now an outcome in the US election has been formally declared this creates greater stability globally and has a flow-on effect to Australia. An indicator of this, is that both the US stock market and the ASX have responded positively to the election outcome. In short, the announcement of the US election outcome will have a positive flow-on effect to the Australian property market.”
Mathew Tiller, head of research and managing director of commercial at LJ Hooker expected less trade friction to benefit Australia.
“The announcement that Joe Biden will be the next US president will not have a direct impact on Australian property markets; however, the conclusion of a long and hostile election, will indirectly raise market confidence. Overall, Biden’s approach to trade and domestic fiscal stimulus are two key areas to watch; as they have the potential to have a positive knock-on effect for the Australian economy.
“It’s expected that Biden’s foreign policy agenda won’t be as combative and therefore should bring a de-escalation to some of the simmering trade wars. This will benefit Australian businesses given these trade wars are with some of Australia’s largest trade partners.
“One of the president-elect’s first tasks will be to re-build the US economy after the COVID-19 pandemic; to this end, it’s expected that a number of large fiscal stimulus measures will be implemented to boost economic activity, and a strong US economy in-turn benefits the global economy.
Originally published as What US election result means for Australian real estate
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