Posted: Nov 14, 2016
It’s the election result that none of us expected. Donald Trump sweeps to victory by 279 votes against Hillary Clinton’s 228. The polls predicted that Clinton, the front-runner would win, but early on Wednesday morning the race for the 45th Presidency of the United States was over.
Hillary’s supporters were predominantly concentrated around NYC, Washington and California, while Trump took the lead in many other parts of the country. A sea of red dominated most of the mid-western states.
As the shock waves reverberate around the world, we ask what does this mean for global property markets? Will some countries be seen as safe havens? Will home-hunters look towards London for their next investments? Here 10 leading property professionals from around the globe share their reactions and predictions on the Trump victory.
1. Louisa Brodie, Head of Search and Acquisitions, Banda Property (www.bandaproperty.co.uk)
“Following Wednesday’s shock result in the US, London is waiting to assess what Donald Trump’s victory really means. With global stock markets currently in turmoil and the weakening of the US dollar, Central London’s property market is going to look increasingly attractive to those who fear the Trump effect.
“We are likely to see US citizens, perhaps most of all those wealthy elite who may have been offended by his campaign tactics, move to the UK now that the reality of the voters’ decision is sinking in.
“After a viciously fought campaign that has not endeared him to many around the world, London may now appear a far more attractive option to these buyers who had previously considered buying in the US.
“Banda has already seen an increase in US dollar buyers in Central London since the Brexit vote in June and now we are going to see more Americans considering a move to London in the aftermath of today’s result.
“The recent fall in the value of sterling means there are even more attractive options available in the London market for buyers from across the Atlantic.”
2. Ingrid Burke, International Editor, Tranio (www.tranio.com)
"It is difficult to predict with any certainty what impact Trump’s victory might have on foreign property markets as it remains to be seen how his campaign promises will materialise. One trend worth noting is the interest many Americans, who are disenchanted with Trump have displayed in relocating and waiting out his presidency abroad.
“Canada has proven to be a popular option among those considering a move. Google experienced huge upticks in American searches related to moving to Canada on election night, and Canada’s official immigration site famously suffered numerous crashes before and after the results were announced. Following a lengthy boom, Canada’s property market has recently showed signs of cooling. A large wave of Americans could bolster demand for residential properties in major cities across Canada.
“The UK is another attractive option for Americans considering a move abroad, particularly in light of the fact that UK property prices have fallen in the aftermath of Brexit.
“The Trump victory could also increase demand for commercial property in the UK. Since Brexit, international investors have displayed a wariness toward London’s commercial real estate due to political uncertainty. A Trump victory could change that."
2. Thomas Espy, Real Estate Expert, Tranio (www.tranio.com)
"As with most of Trump's stated plans for US economic policy, we still don't quite know what he will push forward with and what he will drop. His claims of putting pressure on businesses moving abroad via tariffs, etc., might have just been campaign posturing. “Companies will need to wait to see what the final count is in Congress, and they will need to wait to see how his intentions evolve before January 20.”
3. Charles Curran, Principal at Maskells (www.maskells.co.uk)
“Our initial reaction to the US Election result for the UK property market is favourable. Sterling has strengthened against the USD by 0.32% this morning which, notwithstanding a potential hike in the US in December, may start reducing some of the post BREXIT inflationary pressure in the UK. This is good for mortgage payers as it reduces the likelihood of the BOE’s hand being forced to increase rates to counter a strong dollar; the currency in which many imported products are priced.
“Furthermore, this morning we saw that the Canadian immigration website crashed as US citizens sought to acquire Canadian citizenship. This bodes well for the UK, as it is one of the only other fully English speaking countries within financial market time zones and it is really those with country transposable skills (who can work anywhere) who may decide to make the move. London would make more sense than perhaps Australia or New Zealand, the other alternative being Hong Kong where property prices can be much higher than London.
“We may not see an immediate move, as President Elect Trump’s transitional team start their work, but already the markets have reacted badly. However, our view is that there may be a small knee-jerk reaction to his win, but if Americans are to move to the UK in significant numbers, it will be after he has taken office and established what the relationship will be like between the Republican House and Senate.”
4. Brendan Roberts, Associate Director, Aylesford International (http://www.aylesford.com)
“There has been a generally negative response to Trumps election, but clearly the American people have voted for change and elected someone new to politics. Rather like us, Brits voted for Brexit, it was all rather unexpected and against the pollsters predictions.
“The markets have reacted negatively, so sterling has regained a little of the lost ground against the dollar, making London a little more expensive today than it was last week for an American buyer with dollars. Many predict lots of Americans will leave following Trumps election, but this option is presumably only a reality for the privileged few who have business outside the US or employment opportunities overseas.
“Like Brexit there is a huge uncertainty over what the outcome will be – what is Trump’s overall foreign policy, will he really leave NATO or insist that members pay their contributions in full? I think the added uncertainty probably means that we are now in a period of unprecedented uncertainty globally until we fully-understand Trump’s plans.”
5. Richard Bernstone, Director at Aston Chase (www.astonchase.com)
“The wave of disenfranchisement and appetite for change has clearly been voiced across the pond, just as it was here in June with the Brexit referendum result.
“From a PCL residential perspective, while Americans have never been prolific buyers in London due to their complex tax liabilities, I am sure that there will be some, perhaps those already renting here, that may decide to take up permanent roots in the capital.
“In addition, international dollar based buyers, who have been ‘holding off’ following the recent weakening of sterling, may now decide that it is the right time to buy before the dollar starts to weaken in the wake of this election result. Believing that there is still value and safety in investing in what is still considered a strong property market in a thriving multi-cultural city.”
6. Alex Newall, Managing Director, Hanover Private Office (www.hanoverprivateoffice.com)
“While stock markets are quick to react, the property markets will be a little slower and buyers will place on hold their searches until the dust settles. This pause may bring a few short term forced sells as loans expire due to failed sales. However, generally in the US, prices should hold in the near term. Looking abroad, if Trump is to re-write global trade deals to increase US jobs and tax imports, we could see falls in the currencies of weaker economies.
“Currently, with an historically cheap pound, now just might be the time to jump into UK property as borders tighten around the USA. We have already seen notional signs of USA buyers in the Prime Central London property market in recent weeks and we could see more emerging over the coming weeks fairly soon. From disgruntled LA pop stars to the New York business community hedging their bets, the west and east coasts who voted for Clinton maybe looking towards London as a good alternative.
“And why not? There are already many American Community Schools (ACS) here both in London and outside with the likes of ACS Egham near St George’s Hill – two American style communities.
“US Investment banks in London are numerous in the City and it’s generally a multi-cultural society that welcomes Americans. As ever, it’s just too early to tell what market movements will happen, but we should see more Americans buying in Prime Central London in the coming months.”
7. Lloyd Hughes, Athena Adviser (www.athenaadvisers.com)
“In the wake of the US election results, for property investors the biggest question hangs over the US economy. Trump is unlikely to follow all the hard lines he took on trade during the election, but there may be trouble potentially on the horizon as many international investors, who were previously targeting stable US property markets are likely to look elsewhere.
“Many wealthy US citizens claimed they would up and leave should Trump win, but in reality, this is unlikely to happen in serious numbers. Even though Canada’s immigration website did crash through the night. Trump built his empire on real estate, so he’s unlikely to mix things up with taxes in the way Hollande did in France back in 2012, causing the mass exodus of France’s HNWI through a 70% wealth tax on net assets above €1.3m.
“Where are US buyers going to look? Ironically, after Brexit took a bite out of London’s reputation among international investors, we expect to see renewed interest in the British capital, especially for commercial property. The lease of a prime commercial asset in London is normally 15 years with a yield of up to 10%, so there is plenty of time to see out Trump’s term.
“For more than a year, currency has been the biggest catalyst for Americans buying overseas and there is resounding uncertainty over whether Trump’s economic policies will affect the USD currency negatively. Dollar buyers from around the globe will want to capitalise on their strong position against the GBP and Euro. By next spring, things could look very different, so this is a golden window for those seeking to invest capital abroad.
“USD buyers targeting Europe are still around 24% wealthier than they were two years ago. US buyers have always had a love affair with Paris, so with both currency and historically low mortgage rates in their favour, demand is expected to increase in the short term.
“We expect cities such as Lisbon to also see increased interest, but not necessarily from US buyers. South American investors, especially from Brazil, are now much more likely to steer clear of usual favourites like Miami and New York. With a flexible Golden Visa programme and cheap prime real estate, Lisbon was already a strong contender to Miami and a Trump presidency will only build on this trend.”
8. Ohio-born Jean Liggett, CEO of UK's Properties of the World (http://propertiesoftheworld.co.uk)
"The US economy remains the force that sets the pace for the rest of the world. Even with the rise of China and the growth of other emerging markets, America is still the strongest economy in the world.
"Donald Trump's US presidential election victory raises concerns over the impact of this outcome for global economies, including that of the UK. Today's Trump victory is likely to cause market trepidation around the world. Many companies and investors may look to move their investments and companies, at least in part, out of the US to safer havens.
"Trump's election could generate a significant movement in the US dollar and potentially jeopardise US diplomatic relations across the world. However, Trump's victory may well prove beneficial for the UK property market, as investors seek to migrate their portfolios from the US to a more secure and predictable market - the UK. This may even mean that the sterling could rise in value. Only time will tell how the US property market - and others around the world - respond to his election victory."
9. Naomi Heaton, CEO, London Central Portfolio (www.londoncentralportfolio.com)
“Given the unprecedented turn of events as the US Election result is announced, the London property market will clearly not be top of your agenda today. However, it is London Central Portfolio’s view that there will be a net positive impact on the market as investors retrench to blue-chip tangible assets as uncertainty on the political and economic stage is heightened once again.
“Jitters in global equity markets driven by widespread speculation will be countered by flights to safety, with gold, the Yen and Swiss Franc set to benefit. While the result will likely move the global spotlight away from Brexit, repercussions may be felt across Europe with the prospect of anti-establishment votes becoming keener. At the same time, the likelihood of the UK Parliament thwarting the people’s mandate to exit the EU has dwindled.
“While all of this plays out, Prime Central London property, a traditional safe haven, is expected to benefit from a similar flight to quality, asset-backed investments.”
10. Simone Rossi, Managing Director at Gate-Away.com (http://www.gate-away.com)
“US property investors are some of the most interested buyers of Italian homes. As well as the Brits, they're definitely the most enamoured with the 'boot-shaped' country. According to our statistics, we have seen them in the top three for the number of enquiries sent thorough Gate-Away.com for houses for sale in Italy.
“And we strongly believe the Italian property market could benefit even further from this US presidential election. It will strengthen the American passion for the peninsula.
“Along with better climate, exquisite food, history etc. one of the reasons why overseas buyers move to Italy is very often a sentiment of dissatisfaction for its own country and political conditions.”
