Economic Highlights by Clifford Bennett

Positive Surprises Ahead

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EXPECT THE UNEXPECTED

It is amazing how quickly the tide can turn. The tide of sentiment.

How people are feeling about a market is all important. This is why we have had to consider the various crisis moments, of the past few years, and then look for the upside of the real underlying situation.

President Trump, up until now, has been a major negative for market sentiment globally, and that includes the property market in Australia. I do not mean this in real economic impact terms, but just the negativity barrage of the media we have witnessed daily has been felt by people. Which leads to a false fear scenario.

Sometimes, as was the case with the Brexit false fear, people actually stopped buying property in Australia for a weekend or two. It was not logical. In was an emotional response to the media negativity of the time. This is always the opportunity however, because markets always return toward the real fundamental trend. Which in this case, remains resolutely favourable and to the upside.

Positive Surprises Ahead

Interestingly of late, the negative Trump media barrage has not in fact been enough to stop the market from rising generally. This says a great deal about just how truly strong the underlying, still to come to market, buyer interest and need there really is for Australian property right now. I really think there is no room for hesitation here. Everyone is starting to see that there are less clouds on the horizon than has been the case for many years. This is going to lead to a fresh phase of enthusiasm among potential buyers.

The big surprise is that we may be leaving most of the negativity about Trump behind us now.

You can only milk the same story so many times. Though Trump is likely to remain controversial, we are actually about to enter a new phase of potential economic positivity, in regard to President Trump.

This week he has reassured markets that his bold tax reform announcements are in the making and will be released soon. Now, as is Trump’s way, these are unlikely to be small gestures. He enjoys stretching any position, as far as he can in his first salvo. Whether what he announces in coming weeks will actually come to fruition, remains to be seen. However the announcements themselves are very likely to trigger strong gains in the US stock market, and that always leads the property market sentiment in our world too.

The Australian property market is very strong in its own right, and any buyer hesitation that was a function of Trump fearfulness may be about to be emphatically vanquished.

The surprises from here, are more likely to be positive, than negative. We maintain a strong outlook for property.

Clifford Bennett

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