Colliers International’s Chief Economist, Walter Boettcher, has responded to the outcome of the US Election and its potential impact on the commercial property sector.
“For commercial property, the key policies that are likely to drive capital flows globally, including both to and from the US, will not be known for some time, says Colliers International’s Chief Economist, Walter Boettcher. “Once again, just like after the EU Referendum outcome, we are left with more questions. How isolationist will the US become under Trump? Is the EU-US trade deal dead? Will the US offer a trade deal to the UK so as to keep the UK within the US geopolitical sphere? How much will immigration controls be tightened? Will Trump try to make good on his various ‘bombastic’ policy ideas or was this all just hyperbole? Time will tell, but do not look for any clear indicators until the end of the year and even then, the likelihood is that his policies will only become clear over his first ‘100 days’.
“In the meantime, another layer of political uncertainty has been added to EU/UK uncertainties. This will mean that business investment will be buffeted. Global direct property investment activity will continue, due to the sheer weight of global capital, but a slow-down is anticipated, at least until global currencies settle at new levels. Occupier markets may see increased caution and hesitation by international operators. Once again, this uncertain environment is looking more like the new normal, but businesses and markets will no doubt adapt as they always do.”
Overview
Boettcher continues: “Financial markets may bounce about over the next few days, but will settle. The election result may not really have been about Trump, just as the EU referendum result may not have been about the EU. The Republican establishment will have no choice but to support Trump, hence Trump, like it or not, will be surrounded by career politicians keen to give advice and lend support. Hence moderation is implicit in simply taking office. His acceptance speech included no pejoratives.
“Trump’s appointments to key positions will be crucial to understanding what and whether he is likely to delivery. Trump is not a friend of the neo-conservatives, this cannot be bad, given that they brought us Iraq and the aftermath. Likewise, economic policies will also be a committee job, so expect some moderation from election rhetoric. If there is an immediate worry, it will be the social consequences of an electorate that remains deeply divided by race and wealth. For now, we can only monitor events.”