Welcome to this week’s edition of Property Edge, where we’re delving into some key trends shaping the Australian property market as we approach the year’s end. From the potential economic impacts of Trump’s return to power in the US to the rise in distressed and long-term listings, we’re examining the forces at play in today’s shifting landscape. Plus, as the Christmas season draws near, we explore why the holiday period could present savvy buyers with unique opportunities in a traditionally quieter market.

Quick heads-up: Before we get into the details, we wanted to share something important.

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High rates and rising mortgage stress mean more distressed properties on the market. Fast Property AI is your go-to tool for uncovering off-market deals, long listings, and motivated sellers who need to sell fast.

We’re giving you instant access to this powerful property research software—completely free.

No fees, no obligations—just smart, data-driven insights to help you seize high-profit opportunities in today’s challenging market.

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P.S. Be among the first 100 to secure this exclusive offer—early users get the best deals, especially during the holiday buying season!

Back to the newsletter….

Trump’s Victory and its Ripple Effect on Australia’s Economy

Key Points Summary

1. Interest Rates Impact: With Donald Trump’s policies expected to drive inflation, global interest rates, including in Australia, are likely to stay high. The RBA’s rate cuts are now delayed, with investors projecting a reduction of only 0.4% by July 2025, a revision from the prior 0.5% by May.
2. US-Australia Dollar Effect: Following Trump’s win, the Australian dollar fell almost 2 cents, settling at 65 US cents. Global bond yields rose, reflecting anticipated inflationary pressure due to Trump’s proposed 60% tariffs on China and increased US government spending.
3. Australian Exports and Chinese Demand:
   • Trade Tensions: Trump’s aggressive tariff stance on China could decrease demand for Australian exports, like iron ore, coal, and gas. Australia’s economic growth may fall by 0.3%, or $7 billion, by 2035, if a China-US trade war ensues.
   • Chinese Resilience: Economists predict China might offset these tariffs through internal stimulus, though slower Chinese growth would still likely reduce Australian commodity prices and exports.
4. Corporate Tax Competition: Trump’s proposed corporate tax cut to 15% (down from 21%) risks making Australia’s 30% corporate tax less competitive. Australia may face pressure to reduce corporate taxes to retain international business appeal.
5. Market Uncertainties: Trump’s policies introduce new uncertainties around climate policy and global trade. Potential US withdrawal from the Paris Agreement and increased fossil fuel support could alter global investment patterns, affecting Australian renewable and mining sectors.

Economic Implications:

• Australia may experience weaker economic growth if tariffs reduce demand for exports.
• Continued market volatility with shifts in interest rates and exchange rates.
• Inflation and interest rate increases could impact mortgage holders and consumer spending.

Conclusion: Trump’s economic policies, particularly around tariffs and corporate tax cuts, are poised to challenge Australia’s economic landscape, from exports to corporate competitiveness, underscoring the need for adaptive fiscal strategies

Trump’s Win: Potential Impact on Australian Property Market

Donald Trump’s recent U.S. election victory could send some shockwaves through the Australian property market, mainly through increased pressure on interest rates and the broader economy. Here’s what homeowners and buyers need to watch:

1. Interest Rates Stay High for Longer: Trump’s proposed policies, including increased tariffs on China and significant government spending, could drive up global inflation. This may keep global and Australian interest rates higher for longer, making mortgages more expensive and potentially reducing borrowing capacity for buyers. Higher rates may also pressure current homeowners, particularly those with variable-rate loans, and could increase the likelihood of mortgage stress.
2. Shift in Housing Demand to Outer Suburbs: With interest rates potentially staying elevated, housing affordability in city centers may decline further, driving buyers to seek more affordable options in outer suburbs and regional areas. Rising mortgage costs mean that buyers will be increasingly priced out of inner-city locations, potentially accelerating the trend toward suburban and regional growth.
3. Impact on Australian Dollar and Property Prices: The Australian dollar has already dropped nearly 2 cents against the U.S. dollar following Trump’s win. A weaker dollar could make imported goods more expensive, adding to inflation pressures. For property developers, this may mean higher costs for imported materials, possibly pushing up construction costs. Higher costs could slow down new housing developments or push up the prices of completed projects, further straining affordability.
4. Potential Effects from Chinese Trade Slowdown: As China faces potential tariffs from Trump’s policies, any economic slowdown there could reduce demand for Australian exports, such as iron ore. This would affect Australia’s overall economic health and may influence property market stability, especially in mining-dependent areas. A cooling economy could dampen wage growth, further affecting the ability of Australians to purchase or invest in property.

In summary, Trump’s policies could create challenges for the Australian property market, particularly by keeping interest rates high and driving buyers to the outer suburbs as affordability concerns grow in city centres. Homeowners and buyers alike may need to prepare for a potentially prolonged period of economic adjustment.

Victoria Sees Sharp Rise in Distressed Property Listings

Victoria, particularly Melbourne, is experiencing a substantial increase in distressed property listings, with a 28.4% jump over the past year, making it the first large Australian state to surpass pre-COVID levels. SQM Research’s October data reveals that distressed listings across Australia reached 5,351, a 3.3% monthly rise but a 3.1% decrease from last year. Victoria, however, stands out with both a 5.6% monthly increase and a significant year-on-year rise, suggesting growing financial pressures for many homeowners.

Old listings, properties on the market for over 180 days, have also climbed, up 10.1% nationwide. Melbourne saw an 11.3% year-on-year increase in old listings, reflecting challenges for sellers in the city, and Sydney saw a 6.4% increase.

Meanwhile, other cities like Brisbane, Perth, and Adelaide are seeing lower total listings, indicating a healthier market balance. Brisbane’s total listings dropped 4% from last year, with declines in both old and distressed listings exceeding 10%, while Adelaide saw a 14% decrease, and Perth dropped by 18.6%.

According to Louis Christopher, Managing Director of SQM Research, Melbourne and Sydney’s struggling transaction rates are likely to keep property prices down as interest rates hold steady. The Reserve Bank of Australia (RBA) has maintained the cash rate at 4.35% since November 2023, and no rate cuts are anticipated until at least mid-2025, putting additional pressure on markets with rising distressed listings like Victoria.

This increase in distressed listings could provide opportunities for buyers, yet underscores the growing financial strain on many Australian homeowners, particularly in Victoria.

Christmas Property Market in Australia: A Unique Buyer’s Opportunity

As December approaches, the Australian property market shifts gears, with a seasonal slowdown from mid-December through January. This 4-6 week break over the summer period brings unique opportunities for buyers, who can benefit from motivated sellers, less competition, and the possibility of flexible purchase terms.

Why This Time of Year is Ideal for Buyers

1. Motivated Sellers: Many sellers looking to offload properties before the holiday season are keen to avoid the costs and hassle of holding over the break. For some, that means dodging extra costs like furniture staging, which can run over $2,500 monthly. Eager to finalise sales and avoid holding costs, sellers are more inclined to negotiate.
2. Less Competition: With buyers focused on holidays and family festivities, demand softens, meaning fewer competitive bids and lower chances of bidding wars. According to CoreLogic, property listings in December often see fewer views than any other month, giving determined buyers an edge.
3. Agent Urgency to Close Deals: December serves as a natural line in the sand for real estate agents who are driven to close listings and move stock before the year ends. Exclusive listings are often signed with set terms, meaning agents risk losing their exclusive rights (and potential commission) if properties remain unsold during the holiday downtime. With the clock ticking, agents are highly motivated to secure sales and commissions, creating an additional layer of urgency for quick negotiations and deal-making.
4. Long Settlements and Flexible Terms: Since trades are generally scarce and council offices are closed over the break, it’s an ideal time to negotiate long settlements or flexible terms. Buyers can arrange for longer settlement periods, allowing extra time to plan renovations, apply for approvals, or line up financing.
5. Advance Planning for 2025 Projects: If you’re planning renovations, a long settlement period gives ample lead time to secure necessary approvals, architects, and trades to hit the ground running in 2025.
6. Economic Uncertainty: With Trump’s recent re-election in the US, economic uncertainties are mounting. Possible inflationary policies and tariff increases could make financial conditions unpredictable, adding a layer of caution for many would-be buyers. However, for those who remain active, this uncertainty can mean lower prices and motivated sellers in the short term.

Tips for Buyers in December and January

• Be Ready to Act: Fewer buyers mean more room to negotiate, so come prepared with finances in order.
• Look for Motivated Listings: Check for properties that have been on the market for a while or listings that appear to be staged – often, these sellers are especially eager to negotiate.
• Request Flexible Terms: With agents and councils largely on holiday, a longer settlement can be an easy win for both sides, allowing you the luxury of time without immediate costs.
• Plan for the New Year: Start working with architects, planners, or even interior designers in advance. This way, when the market picks up in 2025, you’ll be ready to start right away with no delays.

For buyers, the Christmas period is a golden opportunity to find deals that may not be available in the busier months. With lower competition, motivated sellers and agents, and the advantage of flexible settlement terms, you could be on track to secure a property with great potential – just in time for a prosperous new year.

As we wrap up this week’s Property Edge, it’s clear that while the property market faces new challenges, there are also significant opportunities to be seized. Whether you’re looking to capitalise on end-of-year motivation from sellers, spot potential in distressed listings, or simply stay ahead of shifting economic winds, now is the time to stay informed and strategic. Keep an eye out for upcoming insights, and enjoy a prosperous season in property!

Important Reminder:

Discover Distressed Deals with Fast Property AI – Free Access Now!

High rates and rising mortgage stress mean more distressed properties on the market. Fast Property AI is your go-to tool for uncovering off-market deals, long listings, and motivated sellers who need to sell fast.

We’re giving you instant access to this powerful property research software—completely free.

No fees, no obligations—just smart, data-driven insights to help you seize high-profit opportunities in today’s challenging market.

Click here to get free access

P.S. Be among the first 100 to secure this exclusive offer—early users get the best deals, especially during the holiday buying season!