Trump’s Presidency Will Impact Luxury Real Estate Markets Globall
The fallout from Donald Trump’s upcoming presidency on luxury real estate markets comes down to an old maxim—location, location, location.
Take San Francisco for example, where a flight of wealthy Chinese buyers in the wake of a potential trade war with China prompted by Trump could create a demand shock in the Bay Area. Secondary markets, meanwhile, like Melbourne, Amsterdam and Vancouver, could all stand to benefit if an unsteady political landscape pushes investors to diversify their real estate holdings, experts said.
If there’s anything the world learned from Mr. Trump’s election—and the U.K. vote months earlier to exit the European Union—it’s that nothing is certain. There are, however, a few nationwide economic changes that economists and industry leaders predict will play out in the near-term under Mr. Trump, including rising mortgage rates, some form of infrastructure spending, deregulation and reduced taxes for corporations and the wealthiest tier of individuals.
While rising mortgage rates will have little-to-no effect on the luxury sector, as buyers tend to pay cash, said Danielle Hale, managing director of housing research at the National Association of Realtors, infrastructure spending paired with lowered corporate taxes would create an economic boost that could spur more real estate investment, at least short-term.
“There’s not a whole lot of detail yet,” Ms. Hale said. “If the infrastructure spending were to go through, we would see a short-term economic boost.”
Counteracting that, however, could be a flight of foreign buyers, as aggressive trade policies or offensive rhetoric from America’s top leadership pushes them to invest in cities outside of the U.S. To get a better sense of how these scenarios might affect prime real estate’s major markets, here’s a global city-by-city breakdown:
