Are geopolitical issues forcing Far East property investors to widen their net?

There is no escaping the fact that Donald Trump is causing major concerns across the Far East with his seemingly personal battle with Kim Jong-un. Just this evening yet more threats have been published from Donald Trump despite the fact that the North Korean authorities are taking no notice whatsoever. There have been concerns about real estate prices in some Far Eastern markets, such as China, even prior to the ongoing US/North Korean issue and these could be exacerbated in the current environment.

Geopolitical issues

For some time now Far East property investors have been looking elsewhere with the likes of the US, Australia and more recently India in receipt of significant Far East investment funds. The UK has also benefited from Far Eastern property investors spreading their net wider although the near 20% reduction in the value of sterling has probably helped. While China has given lukewarm support to the US pursuit of North Korea, and the attempt to close down any nuclear warhead facilities, many are concerned about a worsening of the situation in the short to medium term.

Indeed, Donald Trump has already been openly discussing a nuclear retaliation before he has even offered to sit around the table and negotiate.

Looking for safe havens

Historically the UK was seen as a safe haven by many Far East property investors, and it is still today to a certain extent, but many are now widening their net. We have growing Far East investment in European property, Australian property and as we touched on above there is growing demand for the Indian real estate market. It may not necessarily be investors looking for safe havens but perhaps more steady economies and political situations. Will this impact the US real estate market?

There are real concerns that the current strategy instigated by Donald Trump could be a sign of things to come during his presidency. Even though his term as president has only just begun he has already shown an appetite for dismissing those around him who disagree with his views and policies. He has made some influential enemies amongst the US political elite and there is a growing feeling they are gunning for him.

US real estate

As we mentioned in one of our recent articles, US house prices increased by an average of 5.1% during 2016 with expectations of around 5% in 2017. So far there has been relatively little in the way of help from Donald Trump, despite his background in real estate, and many are now beginning to wonder if this will ever emerge. So, in reality it does look as though US house prices are increasing and demand is growing despite Donald Trump and not because of him.

The US economy is moving back into growth mode but Donald Trump has created so many issues with overseas counterparts that this growth could be in doubt. This could obviously have an impact upon investment in US real estate, by both domestic and overseas parties, but time will tell. There is a chance that geopolitical issues created and encouraged by Donald Trump could yet come back to bite him and the US real estate market!

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