What could political divide in the US mean for the property investment market?

 

Reflecting on the impact of Trump’s victory in last week’s US election, Seven Capital’s International Sales Director, John Treacy, discusses the potential influence a political divide in the US could have on the property investment market.

It’s fair to say that 2016 has been a year full of surprises, and following a turbulent US election, which saw Donald Trump elected President, many are left wondering about the impact this unexpected result could have on investment opportunities across the globe.

The lack of confidence and clear political divide now happening in America has already led to many high level transactions in the US being postponed which, as a result, has led to investors looking at alternative options for their investments. So what does this mean for the property investment market? Will uncertainty in the US lead to a surge of new investments in more stable countries? Or will investors stop investing altogether?

It is too early for anyone to predict the long-term effect of Trump’s presidency, but in the short-term the US will most likely see a decline in investment as confidence waivers. Although this may be a blow for America, property investment markets in places such as Australia, the UK and parts of Asia could benefit greatly, as investors seek different options.

A wave of alternative investments are already beginning to flood the market. We’ve recently seen a rise in the price of gold, which is perceived as a safe haven for investment, since the results of the US election; along with a 300% rise in US investors looking at high-value UK properties.

The US has always topped the list of best places to invest in, but with many investors starting to look elsewhere, its place as number one could soon be challenged. The UK is a strong contender with growth in rental yields outside London attracting investors from all over the globe.  Birmingham especially has seen a huge rise in investment in recent years, with global investors flocking to the area to take advantage of its regeneration, redevelopment and job creation. Increasing demand for high quality, city centre accommodation coupled with low residential stock, provides a sustainable investment opportunity with a low entry price. Birmingham’s central location, transport links – particularly to London – and quality of life, make it an ideal location to live and invest in.

In conclusion, in the short-term at least, the result of a Trump presidency looks likely to prove beneficial for prime housing markets outside of the US.  Whilst the property market in the UK slowed initially post Brexit, transaction levels and prices are now on the rise and political change along with uncertainty in the US could further fuel this growth through 2017.