Property Hub - Investment Insights & Inspiration - Get Invested: Will Trump’s global dump cause a property slump?

Episode Date: April 22, 2025

With Trump back in the headlines and chaos erupting in global markets, it’s time to ask the question: What does this mean for Australian property? In this special Bush Bite episode of Property Hub, Bushy Martin breaks down the global economic shake-up triggered by Trump’s latest tariff wars and executive orders—and what it all means for investors at home. While markets reel from volatility and fears of recession, Bushy explains why Australia’s housing market may not only hold strong but could even benefit. From iron ore exports to interest rate cuts, Bushy walks you through the factors shaping our property future—and where smart investors should be looking next. In this episode: What Trump’s tariffs and trade wars mean for Australia How global volatility could lead to RBA interest rate cuts Why Australian property could benefit from economic uncertainty Areas and sectors that may struggle (and why) The 3 I’s of future property growth: Infrastructure, Industry, Incomes Where savvy investors are focusing now Key Takeaway: Despite the global chaos, Australia is unlikely to fall into recession—and well-located, in-demand property is still a strong play. It’s not about when to buy, but where and what. Read more on the KnowHow blog. Find your Freedom Formula Success in property starts with your 'why', and then the 'what' and 'how'. Let me, Bushy Martin, lead you through it! Sign up for my Freedom Formula program. The first session is absolutely free, and it only takes around an hour! Find out more https://bushymartin.com.au/freedom-formula-course Subscribe to Property Hub for free now on your favourite podcast player. Take the next step - connect, engage and get more insights with the Property Hub community at linktr.ee/propertyhubau Book a personal solutions session with Bushy to go deeper on your specific property needs or challenges Continue the discussion with likeminded investors and experts on The Property Hub Collective Facebook group Get a copy of Bushy's book, Get Invested, for FREE, and find out what it takes for you to invest in living more, working less Get all Property Hub info here linktr.ee/propertyhubau About Get Invested, a Property Hub show Get Invested is the leading weekly podcast for Australians who want to learn how to unlock their full ‘self, health and wealth’ potential. Hosted by Bushy Martin, an award winning property investor, founder, author and media commentator who is recognised as one of Australia’s most trusted experts in property, investment and lifestyle, Get Invested reveals the secrets of the high performers who invest for success in every aspect of their lives and the world around them. Subscribe now on Apple Podcasts, Spotify and YouTube to get every Get Invested episode each week for free. For business enquiries, email [e-mail] omnystudio.com/listener for privacy information.

Hi friend and fighters, it's time for a special bush bite because the Apprentice White House Edition Series 2 is now in full swing and the tangerine tornadoes on again, off again, up again, down again, bully boy wrecking ball is creating global chaos. So are we about to slip into recession and what does it all mean for Australian property? Let's unpack this both objectively and mutually from a property investor's perspective. Now if you haven't yet listened to my late 2024 chats with PK Gupta here on Get Invested, it'll be worth you going back and checking him out. Because back then, my early concerns about Trump are quickly shifting from scary potential nightmares into cold hard reality. Since the global share market highs in February

2025, Trump's erratic tariff wars and other tantrums wiped up to 10 trillion US dollars of global equity value in a see-sawing scissor action. Markets are now riding the oscillating waves of a volatility rollercoaster with no signs of slowing down. Trump's Liberation Day tariffs, or Liquidation Day as many are calling it, are worse than expected. And China and other affected nations are retaliating. Fears of a full-blown global trade war are now very real.

And the numbers are telling. U.S. shares down 19%, global shares down 17%, Eurozone down 15%, and Aussie shares down 14%, which is worse than the post-COVID crash. We're staring down a potential global bear market. And all from the midnight tweets and mood swings of one man. Who would have thought it possible? But this is exactly the point. As was said back in the 1930s, all it takes for bad to prevail is for good people to do nothing

And sadly, we're here again Trump has already issued 129 emergency executive orders in dictator fashion In order to bypass the Congress And the world's watching like stunned rabbits sitting in the headlights So what's this all mean for us? Will Trump's dump push us into a recession we didn't meet? And will Aussie property prices fall and crash? Well, let's follow the bouncing ball.

Trump's narcissistic, irrational approach has undermined decades of global trust and stability. If his tariffs stick, where tariffs mean a tax on imports, where US consumers will actually pay more on affected items, US inflation is likely to rise short term before consumer confidence falls and recession kicks in. And when the US coughs, the rest of us start sneezing. The US is still the world's largest economy, so this is likely to have ripple effects. But how much does it really affect us here in Australia? Well, directly, not much.

Only 5% of our total exports go to the US, which will cop the 10% tariffs. But the US is our largest beef export destination, with over 30% of our beef going there. So beef producers and affected regional towns are likely to feel a pinch. However, the big domino flow-on effect is likely to come from Trump's tariffs on China. Why? Because the US is China's top export destination at 15% of total exports, which is double the level of China's exports elsewhere. So Trump's 145% current tariff is likely to hurt China significantly at a time when its economy is already slowing and struggling.

And that becomes a problem for us potentially, because China is our biggest export customer. Around 37% of Australia's total exports go to China, which is over a third. Japan is next at just 16%, and South Korea trails at 7%. So a Chinese economic slowdown is likely to hurt us too. Let's look at what we send them.

80-85% of our iron ore, most of our coal, gold and petroleum, plus a lot of our beef, wheat and agriculture. China buys over 23% of all of our agri-exports. Now that's a huge chunk. And 70% of our agricultural production is exported overseas. So yes, this could get bumpy for affected areas. But let's zoom out a bit, because despite the headlines, exports make up only 26.8% of Australia's GTP, or just over a quarter. And this is way less than the world average, which is around 45%. So we're a lot less dependent on exports than most.

Now, IMP economists are saying the chance of a US recession is about 45% currently, and that China's growth is likely to slow from 5% to around 4%, with global growth easing to 2% from the expected 3%. So when the US gets the flu, China starts coughing and we might need a Panadol. But are we heading into recession here in Australia? Well, from what I see and what I'm reading, unlikely. Economist Shane Oliver estimates the tariff impact could drag our GDP down by just 0.2% directly and about 0.5% indirectly.

Add back our 10% Aussie dollar currency drop that's acted as an offset shopper silver and it's likely we'll dodge the bullock unless Trump goes nuclear on tariffs or other measures. But here's the kicker. This global chaos also boosts the case for further RBA interest rate cuts. So don't be spooked by mainstream media fear factories. Even after recent falls, US share markets are still well ahead over the last two years

as they've been pretty much overvalued and there are more falls likely. So what does this all mean for Aussie property? Well, rhyming history tells us that economic shocks often trigger a flight to safety from shares and equities into bricks and mortar. It happened after the GFC, after the pandemic and after the tech wreck. Property tends to bounce back and then rise. Why? Because here in Australia, we've got a massive and growing housing shortfall.

Demand continues to rise, but new supply is falling. Already well behind the extra 1.2 million new homes by 2029 under Labor's National Housing Accord targets by up to 462,000 homes, according to the Property Council. and the Urban Design Institute predicts we'll be around 393,000 houses short over the same five-year timeline. And this on top of the existing national housing shortfall

of anywhere between 165,000 to 400,000 homes depending on who you're talking to. So demands are and supply keeps falling and prices will likely rise where demand remains strong. Then add to this the likelihood of the further RBA interest rate cuts Economists are currently predicting two or more cuts this year in May and August bringing the cash rate from the RBA to 3.6% down from the current 4.1% by year end and possibly going down to 3.1% in 2026

And if things worsen on continued Trump troubles we may see four cuts this year and even a double 50-point cut in May potentially. And what happens when interest rates drop? Well, borrowing capacity rises. Roughly every 1% drop in rates adds about $100,000 in borrowing capacity to the average mortgage. So demand continues to rise. And then throw in the first home buyer and other housing policy sweep and election promises, which means we're more likely to see more buyers, more demand and ongoing limited supply.

You do the maths, the result's looking pretty obvious. But here's a warning, it definitely won't float all property boats. Areas hit by weaker resources or agriculture demand flowing on from the tariffs like WA, regional Queensland, the Fitzroy Basin, the Dry Tropics and the Rangelands are all likely to struggle because reduced local economies means reduced jobs which equals reduced property demand which equals flat property prices

because in property, growth generally follows jobs. So you want strong and growing industries attracting more jobs with higher incomes that attract more people. And while pandemic stimulus has pulled some future growth forward based on the great affordability catch-up, many areas were flatline for the foreseeable future like most of WA, SA and mid to far north Queensland,

a few areas still have the strong potential to shine. So where should you look? Focus on areas that evidence the three I's of future growth being infrastructure, industry and incomes, where infrastructure means new roads, rail and technology that opens areas up, new and growing industry diversity will bring the jobs and we also need strong and growing incomes in those areas to support property as they increase

so people continue to pay more for them. This is your sweet spot. Focus on the three I's. Now, while I never predict the next hot spots because no one can, given there are just too many dynamic variables affecting property conditions, which is akin to trying to forecast the weather, at the time of this recording, it may be worth exploring tightly held areas experiencing the three I's of demonstrated growth. And they are in areas like South East Queensland and regional hubs in Victoria and New South Wales. But remember, if you're going for growth, your achievable and affordable price point for a three to four bedroom home should drive your growth location, not the latest hotspot on a podcast. So in summary, despite Trump's global

chaos, Australia is unlikely to hit recession and property values will likely keep rising in tightly held growth zones. So remember what Warren Buffett says, who's the greatest living investor, be fearful when others are greedy and greedy when others are fearful. Right now, fear is high, which means opportunity is right for the contrarian who's prepared to have the courage to take some action. So be bold, be smart and do your homework and your research. focus on quality properties in high demand low supply areas because it's never about when to buy it's always about where and what and if you need help or a second opinion based on the specifics of your particular needs and situation feel free to book in with me for a personal strategy session

or chat with our know-how property finance team by clicking the link in the show notes we'll help you make the decisions your future self's going to thank you for that's more food for thought and if this has been useful share it with your friends and hit the like and subscribe button so you can get some objective insights into my read on the housing policies of all the major parties from a property investment perspective in the lead up to the federal election and beyond that's going to assist you in making a better informed voting decision that's likely to have big lasting impacts on all of our property futures so remember to always get invested in your knowledge and your network before you invest in assets, and let's keep the conversation going.

Thanks for tuning in to Get Invested on the Property Hub podcast channel, your home for property investment insights and inspiration. Make sure you subscribe to Property Hub for free. Get your weekly dose of Get Invested inspiration, along with every episode of Realty Talk, Australia's top online property show for red hot property investing news and insights direct from industry leaders and influencers. And finally, I'll see you next time.