Economist points to market stability and growth potential amid global economic volatility
Australia’s property market is drawing increased attention from global investors, an economist has pointed out, as uncertainty surrounding the US political landscape prompts a shift in capital allocations.
Speaking during a visit to Australia this week, Cushman & Wakefield chief economist Kevin Thorpe suggested the country’s real estate sector may benefit from growing caution among international investors amid uncertainty surrounding the second term of US President Donald Trump.
“I have to say, from a real estate perspective, when I look at Australia, I see a market that is a safer bet, with upside,” he told The Australian Financial Review.
Thorpe pointed to the resilience of Australia’s property sector during Trump’s first presidency, with strong demand for commercial space in Sydney and Melbourne, and stable office occupancy rates up to the onset of the COVID-19 pandemic.
“Office occupancy held up very well,” he said. “All the way until 2019 before the pandemic, Australia’s capital markets were rip-roaring.”
Data from Cushman & Wakefield shows that during Trump’s first term, Asia Pacific’s share of global real estate investment rose from around 15% to nearly 25%. Capital flows into the region’s commercial real estate grew from $39 billion to $70 billion over that period.
As investor confidence returns, real estate — often viewed as a defensive asset — could gain further favour among institutional investors.
“You could start to see the capital shift more aggressively into sectors like property,” Thorpe said. “In particular, this is where I would make the argument for Australia. Buyers could be looking at Australia [thinking] ‘this is really interesting to me, particularly, given the concerns with the United States... That screens Australia’.”
The economist also highlighted Australia’s comparatively stable economy and lower inflation trajectory as reasons why it may offer more predictable returns. There is also speculation the country could benefit if global trade tensions escalate.
“What that may create is excess supply within the Asia Pacific region,” Thorpe said, referring to potential trade shifts. “In the building materials – the aluminum, the steel, the lumber, stuff that goes into creating a building – part of this, you may actually see disinflation as a result of the trade war.
“Australia is really interesting right now. It is going to be very resilient, given this period of uncertainty, as it has far less exposure to the trade war relative to other countries in Asia Pacific.”
Want to be regularly updated with mortgage news and features? Get exclusive interviews, breaking news, and industry events in your inbox – subscribe to our FREE daily newsletter. You can also follow us on Facebook, X (formerly Twitter), and LinkedIn.
