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Australian brokers have said they would be concerned if any changes to US policy during a Donald Trump presidency resulted in higher interest costs, due to the impact it would have on their clients.
Last week, Donald Trump was elected as the next US president, defeating Democratic candidate Kamala Harris. He is due to be formally sworn in as president in January 2025.
The RBA flagged at a Senate estimates hearing last week that, should Donald Trump follow through on his stated policy intentions, it could end up leading to higher global interest rates.
President-elect Trump has promised a range of measures including higher tariffs on imports, targeting Australian trading partner China, as well as tax cuts across the American economy.
The ABC reported RBA assistant governor Christopher Kent telling Senate estimates that Trump’s measures could lead to higher inflation in the US and higher global rates over the longer term.
Sprint Finance managing director Nathan Massie (pictured above left) said that anything that could lead to higher borrowing rates would be “a real concern”, given the current cost-of-living pressures in Australia.
“Many people are just hanging in there and a slight increase or decrease in rates can have a huge effect on household budgets,” Massie told Australian Broker.
Tom Uhlich (pictured above right), director of Boss Money, agreed that many consumers were already feeling the strain of high interest rates, which “significantly limit borrowing capacity and increase household financial stress”.
“Policy shifts in the US that drive up global interest rates could delay much-needed rate cuts here in Australia, prolonging the economic burden on households,” Uhlich said.
“Easing borrowing capacity is crucial to support consumer spending and stabilising the housing market, so any external factors delaying this process would be detrimental to our economic recovery and everyday Australians’ financial well-being.”
With local banks having predicted rate cuts from early 2025, Uhlich said the new uncertainty could heavily impact consumer confidence just when people needed a boost going into the new year.
“We’re seeing record-high pre-approval levels (and expiries as they fail to find properties), as clients are ready but are held back by a lack of property stock and limited borrowing capacity,” he said.
“A rate cut, or even the anticipation of one, would encourage both buyers and sellers, supporting a healthier property market.”
Uhlich said if uncertainty persisted it could fuel more caution in the local property market, deterring selling and buying activity, and only serve to prolong the “current hesitation”.
“To get momentum back, people need to feel confident about the future—not face more negative sentiment,” he said.
Massie said while it was too early to see any impact of the US election, in the short term, he believed that the Australian market might see some buyers take a 'wait and see' approach toward purchasing.
“With many clients previously holding out for expected rate cuts next year, the current fixed rates around the mid 5's are now looking more attractive for some borrowers,” he said.
Uhlich said he believed that, despite any potential uncertainty brought about by the election in the U.S., Australia was at an interest rate peak now and things should improve some time in 2025.
He said his advice to clients in the meantime was to focus on time in the market, not timing the market.
“I always tell them about the 1.5 bedroom cottage I bought in Sydney 20 years ago for $274K; it’s now worth $2.175 million, and it’s the same dingy cottage!” he said.
Sprint Finance’s approach will remain consistent: a tailored strategy for each client’s unique situation.
“Given the current uncertainty, we anticipate having more conversations about fixing a portion of home loans, particularly for clients seeking stability and peace of mind,” Massie said.
Uhlich said he would tell clients to prioritise what they could control within their own four walls.
“Keep a tight budget, ensure you have the best rate and loan structure to weather the storm, and avoid any rushed decisions to sell. This period calls for patience and strategic planning—ride it out, as better conditions are ahead.”
