Worldwide trade war, will this impact property markets?

Discussion in 'Property Market News and Trends' started by diyhelp, Mar 24, 2018.

  1. diyhelp

    diyhelp Active Member

    It appears that Donald Trump is looking to instigate a worldwide trade war with China seemly his main target. While the headline suggests this is bad news for the worldwide economy, the US has for many years now allowed cheap imports to the detriment of home-grown businesses. Will any potential worldwide trade war have an impact upon property markets? If so, which markets do you feel will be impacted to the greatest degree?
     
  2. realdeals

    realdeals Active Member

    Anything which impacts worldwide, or specific country, economic growth will most certainly have an impact on property prices.
     
  3. Longterminvestor

    Longterminvestor Administrator

    If it impacts the wealth of corporations and individuals then it will have an impact on the worldwide property market. Property markets are directly linked to the performance of economies.
     
  4. George Ahye

    George Ahye New Member

    Interesting question, and one no doubt in the minds of millions throughout Trump's Presidency.

    Let's take this top scale and then scale it down a bit. Globally, if you look at the Housing Bubble in 2007, this shook the world. Especially for us Westerners. I'd hope that humanity has learnt it's lesson following this but looking at the course of history, this is unlikely.

    As such, Global issues create volatility, volatility creates unease and this means people move money. Where money is moved, some markets receive the money, some lose it. But again over history, it always seems to find it's way back!

    Now on a smaller scale, the UK for example, the property market can be seen as simple (although let's face it, it's not). Supply vs Demand. If there are 100,000 properties for sale, and 200,000 households are looking to buy, they enter into a bidding war. Highest bidder tends to win. If there are 100,000 properties for sale and only 10,000 people want to buy, those motivated sellers (i.e. those who can't comfortably hold onto their homes) will have to bend to the buyers offers, making it a 'every man for himself' situation. i.e., take what you can and run.

    So to bring it back full circle and in my opinion, yes the huge cogs that shape a countries economy will change, which will in turn have an effect on the UK property market. But it's easier and again in my opinion, just as effective, to base predictions on what's happening closer to home with supply and demand.

    I'd be interested to hear what you think.

    George
     
  5. FWL

    FWL Member

    When conflict emerges around the world this causes concern amongst investors, whatever type of asset they are trading in, and this concerns tilts the risk/reward ratio in favour of greater risk. As investors perceive there to be more risk, in return they would demand a greater (potential) return. Therefore any softening in house prices as a consequence of worldwide conflict is simply the rebalancing of the risk/reward ratio.
     
  6. sam888

    sam888 New Member

    Absolutely agree with you!
     
  7. FWL

    FWL Member

    Unfortunately, in the cut throat world of investment we live in today there are always people looking to benefit from other people's misfortune. You name it, wars, weather events, etc, etc.
     
  8. jrtbartley

    jrtbartley New Member

    Isn't that the main benefit of investing in property as part of a diversified portfolio? That property markets don't really tend to get affected by what the stock markets are doing?
     
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