In a remarkable political resurgence, Donald Trump has reclaimed the US presidency, securing a decisive victory over Democratic candidate Kamala Harris.
While there’s been considerable speculation about the implications of a Trump administration for the US, Middle Eastern and Ukrainian conflicts, and US-China relations, Australians may wonder: what could a Trump presidency mean for Australia, particularly its property market?
Interest Rates
The most immediate effect of Trump’s presidency on the Australian property market could be in interest rates.
As Trump’s victory grew likely in recent weeks, financial markets adjusted expectations, delaying anticipated rate cuts in Australia. Currently, as of November 7, 2024, market predictions include only one RBA rate cut, likely in May next year. Market analysts expect that global inflation could rise under Trump’s presidency, which may keep Australian rates higher.
The Australian cash rate has remained at a 13-year high of 4.35% for a year, with the RBA maintaining this rate to bring inflation within the target 2-3% range. If global inflation climbs, the RBA may need to keep rates high longer—or even consider further increases.
Home Prices
Despite high interest rates, Australian home prices have been growing, though at a slower pace due to affordability issues. If rates remain high, potential developments like trade tensions could further moderate price growth.
In expensive cities like Sydney, we might see apartment values grow faster than houses, with demand increasing in more affordable suburbs as buyers adjust their budgets. CoreLogic’s recent Home Value Index showed a slight dip in Sydney’s home values (-0.1%) in October, while lower quartile house and unit values rose by 0.5% during the same period.
With ongoing population growth and a tight housing supply, a Trump presidency could even contribute to rising prices in Australia’s affordable suburbs.
Increasing Interest from Americans
A potential second Trump term has also sparked interest from expatriate Americans. Realestate.com.au recently reported a 51% increase in US-based searches for Australian properties through July, as Trump’s re-election chances strengthened.
Progressive Americans, unsettled by the possibility of another Trump term, may consider moving to Australia, which has long been seen as an attractive, progressive destination. This could add to demand in the Australian property market, particularly in cities known for their progressive reputation, like Melbourne.
Source: Australian Property Update
