With the US 2016 presidential election just one day away, one topic that has been surprisingly absent from the main debate has been housing. Trump and Clinton’s contest has been widely compared to the UK’s recent Brexit vote, which was largely considered to have been, in part, a mark of anti-establishment sentiment. While property was a major focus in the UK’s recent general election, and continues to be a concern for personal finances, though, neither presidential candidate has discussed real estate in great detail in the run-up to polling day.
Which President would be a real winner for housing?
According to new research from London estate agents Thorgills, average property prices on UK streets with ‘Trump’ in their name have increased in value by 37.9 per cent in the last five years, compared to 27.2 per cent for streets with ‘Clinton’ in the name. This is far from a serious commentary on the election result, but it highlights just how much the vote has caught the attention of the wider world. Indeed, in the real estate world, the USA continues to be a major target market for overseas buyers, with the country ranking number one on TheMoveChannel.com for the last four months in a row.
Research from Juwai.com reveals that perception of the 2016 election among Chinese investors, the biggest spenders on US real estate in the last year, differs significantly from US property professionals.
Asking 504 Chinese property investors and 416 US estate agents or professionals, the portal’s survey found that 54 per cent of Chinese buyers backed Hillary Clinton to win the election, believing her to be more favourable for foreign investment in real estate. This is despite Donald Trump’s long-standing position in the real estate world, with a host of developments around the world bearing his name.
In the US, meanwhile, 55 per cent of professionals said that Trump would offer better policies for foreign investment. Specifically, 54 per cent of US professionals believed a Trump presidency would increase Chinese property investment, compared to 39 per cent of Chinese respondents. 25 per cent of Chinese respondents, though, said that there would be no impact upon Chinese investment in US property, should Trump win, a sentiment shared by just 6 per cent of US respondents.
Redfin highlights the impact that some of Trump’s broader policies would have upon the real estate sector, noting that one in four constructions are foreign, while 40 per cent of new home buyers will be from other countries in the next 10 years. Redfin has suggested that Trump’s stance on immigration would have a “chilling” effect upon housing in America.
Nonetheless, Juwai.com forecasts that little will change in terms of Chinese demand for US property.
Matthew Moore, the site’s President of the Americas, says Chinese buyers are “here to stay”.
“Will Chinese buyers desert the US market after the election? It looks like they will not. American politics fascinate Chinese because our system is so different than theirs. They are watching our election closely,” comments Moore. “They say you should never talk about politics at work, and this survey shows why. More agents prefer Mr. Trump, and more buyers prefer Mrs. Clinton, so you could imagine a political discussion between them going badly.”
One thing that will be a factor, though, is the performance of the dollar against other currencies; in the wake of the UK’s Brexit vote, the pound has weakened, stimulating demand from overseas investors. British buyers, meanwhile, increasingly appear to be seeking out value opportunities.
Bloomberg’s survey of economists forecasts that a Clinton win would continue the current rally of the dollar, while a Trump victory could cause the dollar to weaken.
“Currency markets are long the dollar and not positioned for a Trump victory, so there may be panic selling of dollar and buying of safe-haven currencies,” Scott Petruska, a Newton, Massachusetts-based senior adviser at SVB Financial Group, tells Bloomberg, predicting the dollar sliding to 99.50 yen 24 hours after a Trump victory and the greenback rallying to 105.25 on the back of a Clinton win. How that would impact wider investment trends in the short-term and long-term, though, is yet to be seen. On the basis of the USA’s steady popularity on TheMoveChannel.com throughout 2016, investor appetite for US real estate currently remains as strong as ever.Google+