Trump presidency inconsequential to property market

Brexit had far more impact.

US president-elect Donald Trump is not expected to be a factor for the HK property market.

According to a research note from Macquarie Research, in contrast to Brexit, which had an immediate and tangible impact on liquidity and the attractiveness of HK real estate, the return of a Republican in the White House (and Republicans in the House and Senate as well) should be minimal on property price.

Further, the report said that although Trump had criticized Janet Yellen for being partisan in keeping rate low, financial market turbulence may once again delay the much-anticipated December rate hike.

Here's more from Macquarie Research:

Over the last 24 hours, US 10-year and 30-year treasury yields rose (Clinton winning), plunged (Clinton losing) and rebounded (Trump victory speech on infrastructure spending) to a 6-month high.

On the other hand, the 2-year yield also followed the same pattern, but only ended up flattish. If Trump’s protectionism, infrastructure capex using expensive local labour and tax cuts without change in welfare spending can result in quality growth, the rate could rise; but chances are slim, in our view.

We expect local factors (liquidity, wealth, politics and policies) to outweigh external shocks in affecting HK property market next 12 months. We reiterate our view of 6% price decline between now and year end, followed by a backend loaded 2017 price growth of 5%. We recommend investors to bottom fish SHKP before it hits HKD100 (yesterday intra-day low of HKD102.40) and CKP before HKD50 (intra-day low of HKD50.85).

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