Even though President-elect Donald Trump has been backtracking on some of his more controversial election policies, some experts are still fearful of the short to medium-term future. The fact is that many of his more controversial proposals will not be pushed through, even though his party has control of both houses, and markets seem to be accepting this. As we saw with the UK Brexit vote, concerns have most certainly been overdone and the impression given by the media is very different to that given by investment markets.
There is a growing opinion that Donald Trump could turn out to be a great ambassador for the US real estate market.
Flight to safety
Ironic as it may sound, if investment markets in the US do finally get spooked by Donald Trump there will inevitably be a flight to safety. Safety in this situation could well be US real estate as we have seen in times gone by. The ability to acquire property and create significant rental income streams has not gone unnoticed by some of the more sceptical investors of today. So, concerns about the policies of Donald Trump could rather bizarrely push many people towards US real estate.
As a large percentage of Donald Trump’s personal wealth, estimate at around $3.5 billion, is real estate related this could be a lucrative side effect for the most controversial US president in living history.
Donald Trump and the US real estate sector
As we have mentioned on numerous occasions, Donald Trump is not a career politician, he is not just a business but he is a businessman with specific skills in real estate investment. True, he has been bankrupt, he has hit rock bottom but time and time again he has bounced back. If we strip away some of the more controversial elements of Donald Trump’s personality is this not a man you would trust with the US real estate sector? Someone who has been there, done it and bought many of the T-shirts?
It is unfortunate that Donald Trump made so many outlandish and controversial comments during the presidential election campaign. However, history may show us that this was the only way that he could get elected as the next president of the USA?
Changing worldwide economy
If Donald Trump does push through with some of his more controversial policies then protectionism of the US marketplace will likely be near the top of his list. He has promised US jobs for US citizens in much the same way as the Labour Party used the same rhetoric prior to losing the next UK election. It seems fairly certain he will introduce some protectionism, increasing trade tariffs for those looking to export to the US, although trading partners are likely to follow suit.
This does have the potential to change the whole balance of the worldwide economy and could hand more power to the likes of China and other large economies. We have already seen significant numbers of Chinese investors targeting the US real estate market when many domestic US investors continue to sit on the sidelines. There is nothing wrong in protecting the employment opportunities of the US workforce but to do this via the introduction of increased trade tariffs could backfire in the long-term.
While many of Donald Trump’s more outlandish election policies continue to grab the headlines, it could well be the issue of protectionism which has the greatest impact.