It’s been a wild few days for global markets, with stocks going up and down like a yo-yo in response to Donald Trump’s ever-changing tariff policy announcements. Whether you’re following the news closely or taking the more stress-free approach of sticking your head in the sand, the shock waves getting sent through the global markets will at some point start to affect you and those around you.
One of the ways that could happen is through housing prices.
You normally wouldn’t expect policies from a U.S. president to have any bearing on your next property move in Brisbane. However, today’s economy is globally connected, and shockwaves in global supply chains have far-reaching consequences. Let’s take a look at what those mean for Australian real estate.
The Global Ripple Effect of Tariffs
It seemed no country was immune from Trump’s tariffs, including Australia, who got hit with a 10% tariff on all goods being exported to the US and a 25% tariff on all steel. The world markets and supply chains reacted almost instantly, with countries exporting goods to the US starting to seek other markets while upping their prices to cover the new costs.
This could mean a couple of things for us in Australia:
- Imported building materials, even those not directly targeted by U.S. tariffs, would go up in price.
- Supply chains would be disrupted as manufacturers and developers looked for alternatives or faced delays from international demand shifts.
It’s important to note that it’s still early days in terms of seeing how this all pans out for the Australian housing market. Let’s take a look at what the REA Group thinks.
What This Means for the Australian Housing Market
According to REA Group senior economist Eleanor Creagh, we could see a rise in the cost of new builds and renovation projects.
“It’s fairly unclear what the end outcome will be at this stage and for the housing market, it’s likely a tug of war with headwinds and tailwinds,” Ms Creagh said.
“If we end up with higher prices for goods used in construction, that could increase prices when it comes to new builds and renovations,” she said.
The costs of building homes get passed on to the buyer, which may put a dent in buyer confidence at a time when people’s budgets are already stretched. Developers may also hold off on new projects, which means fewer options on the market which also serves to push up prices.
The increasing prices of new builds trickles down to the broader housing ecosystem. If new housing stock becomes more expensive, existing properties also see a surge in demand which makes them more valuable.
If the global chaos caused by the tariffs hurts our economy, it could prompt the RBA to lower interest rates. This is similar to what they did through the Covid years. Lowering interest rates gives people more buying power, so could increase demand for property which would prompt a further increase in property prices.
Should Aussie Buyers and Sellers Be Concerned?
At The Henry Wong Team®, we don’t believe you should be overly concerned about the tariffs and their effects at this stage. Certainly don’t use them as any justification in changing your decisions on buying or selling real estate.
We believe the biggest side effect that tariffs could cause is prompting the RBA to bring interest rates down, which would have a stronger impact on the housing market than global supply chain disruptions.
Although it’s early days in Trump’s term, it’s worth noting that we could be in store for many more big financial decisions that rock the global markets. They’ll have the potential to nudge the market in one direction or another, so it’s best to keep an eye on current affairs. Or follow The Henry Wong Team® and we’ll keep you updated along the way.
Get in Touch with the Henry Wong Team®
At The Henry Wong Team®, we keep our eyes on the bigger picture, so you don’t have to. Our job is to help you make smart and informed decisions, whether you’re timing a sale, buying into a growing suburb, or understanding unseen factors influencing local prices.
We understand the market and its wider influences. So if you need any help or guidance with planning your next move, we’re just a phone call away. Get in touch and let’s talk all things property!
