What does Donald Trump mean for your property investments? Gavin Norris
GUEST OBSERVER
Supporters and critics alike agree that Donald Trump says many contradictory things, and that's part of the problem.
Most Australian property investors are confused. They have no idea how his presidency will affect their investments.
Well, I frequently get asked about Trump, and I have some answers for you. The Chinese investors we work with ask us often about the new U.S. President — and other events in the 89 countries where we offer listings for them to purchase.
Here, I share our three most important insights on managing real estate investments in the era of President Trump.
Buy dependable value
Trump's White House has been described by its own allies as "chaotic" and as suffering from "obvious dysfunctionality." The United States is torn between those who ferociously support him and those who are just as vociferous in their rejection of everything he stands for.
Some of this turmoil is making its way to Australia. Cory Bernardi and Pauline Hanson are among those who have announced they hope to reorient Australian politics and society in a more populist fashion. Many promise to resist.
Politics is in ferment, and politics does affect the economy. A Parliament in turmoil can't pass economic reforms, infrastructure plans or jobs bills.
In this environment, a smart property investor will look for assets with enduring value. Now is not the time to speculate on quick capital gains.
Be strategic and play it safe with a long-term investment in suburbs that have good access to transit, shopping and quality schools. If you negatively gear, try to keep your negative cash flow well within manageable territory — in case the worst happens, like losing your job or facing unexpected, large expenses.
Find opportunities amidst the confusion
We all hope President Trump doesn't start a trade war (or any other kind of war). If he does create market turmoil, however, smart investors will look for opportunities among the confusion.
Warren Buffett's famous advice applies here: be greedy when others are fearful and fearful when others are greedy.
Remember, Trump can serve as President for only four years, or eight if he is reelected. And, as we have seen with the last several Prime Ministers, even Australian politicians come and go.
The Commonwealth, on the other hand, is a prosperous country with a swelling population that is relatively enlightened, innovative and industrious. Whatever the short-term vicissitudes, it is impossible to imagine this country being poorer or smaller in 10 years.
If the current political disputes hurt confidence and undermine the market, that is your moment. Seek to find buying opportunities whose price has suffered, but which look likely to revert to trend in the medium term.
Look to Asia
Ours has been branded the China Century for a good reason. China already has the world's largest total population, the world's biggest middle class and the world's most numerous ultra-high-net-worth demographic.
Chinese are the biggest property investors in Australia, the USA, Canada, the UK, New Zealand, Thailand, Singapore, Hong Kong, Japan and many other countries.
Australia exports more to China than to any other country. China is our largest source of international students, our most valuable tourism market, a major source of foreign direct investment and our largest agricultural goods market.
If you work in the property industry, then you need a China strategy. If you invest in property, then you need to understand how Chinese buying trends affect your investment.
These are my three tips for succeeding at property investment during this unpredictable moment in time.
Gavin Norris is head of Australia for Juwai.com, the No. 1 Chinese international property portal and can be contacted here.
