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Brokers have expressed concerns the Australian 2025 property market and economy could be impacted by events completely outside of their control in other countries around the world.
Home Loan Experts brokers have sounded a warning that the potential policies of the incoming Trump Administration in the US, as well as the Chinese economy, could impact local brokers.
Senior mortgage broker Jonathan Preston (pictured above left) said the stated intentions of the incoming US administration, including potential tariffs on imports, could result in problems for property.
“One of my concerns at the moment is around bond yields going up in the US, which puts up global bond yields. This will play into higher rates here, which is negative for property prices,” he said.
He also expressed concern about potential tariffs, which incoming President Donald Trump has said that he intends to place on some imports, because they could end up resulting in inflation.
Though the RBA had been expected to cut interest rates at some time in 2025, any further inflationary pressure will need to be factored into future RBA decisions on local interest rates.
Broker Sheng Ye (pictured above right) said last week declines in the Australian dollar against the US dollar were a reflection of market expectations that any coming Trump tariffs will damage the Chinese economy.
With China being Australia’s biggest trading partner, there was recognition that the Australian economy could be collateral damage in any imposition of tariffs on the Chinese economy.
Chinese property developer activity has also shifted, Ye said, with the brokerage expecting China’s economy will be one of the largest global influences on Australia’s property outlook.
“Chinese developers who were once eager to invest in large-scale property projects in Sydney and Melbourne have largely exited the market,” Ye said.
“This is a sharp contrast to previous years and is expected to result in reduced [overall] investment from China in 2025.”
China is also dealing with a “prolonged property market crisis and declining consumer confidence” according to Home Loan Experts, with property values dropping by about 30% from their peak.
The firm also notes a high youth unemployment rate in China, and predicted that 2025 was unlikely to bring a dramatic recovery in the Chinese economy.
“The ripple effects of China’s economic downturn, combined with local pressures, mean that Australia cannot expect the same export-driven growth as in previous years,” Ye said.
Preston said that, despite the current challenges in China, he was bullish on China longer term.
“I expect the Chinese economy to start to stabilise and markets to potentially start to price in a recovery in the future, as the government executes more stimulus packages over the year.
“I expect China to continue to add stimulus until growth is achieved. In my opinion, the government will go to extreme measures, including down to 0% rates, if required,” he said.
Home Loan Experts CEO Alan Hemmings recently said China will continue to grow but at a more moderate rate, and that growth will not be property driven like it has been in the past.
Hemmings added at the time that rate cuts in Australia were more likely to be later in the year, as he said employment and inflation were still high, and that the Federal Election was coming up.
“It will be interesting to see what gets promised on the housing front but I don't think it matters what gets announced, it has already been left too late to fix housing,” he said.
