The PROPERTY DOCTORS, Sydney Australia Novak Properties
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The PROPERTY DOCTORS, Sydney Australia Novak Properties
EP. 1395 WILL TRUMP'S TARIFFS SHAKE SYDNEY PROPERTY?
Market chaos has erupted following Trump's tariff announcements, sending shockwaves through global financial markets with Australia's ASX experiencing a staggering $35 billion plunge. But what does this mean for Sydney property prices? Drawing on 32 years of real estate experience, I'm seeing patterns that suggest property markets may actually benefit from this volatility.
When stock markets tumble, remember that money doesn't simply vanish – it moves. Investors pulling out of equities are now holding substantial cash positions and seeking alternative homes for their capital. This wealth transfer between asset classes often follows predictable patterns, with property emerging as a beneficiary during uncertain times. While gold and silver have seen immediate spikes, real estate typically experiences a delayed but meaningful response.
Property's inherent stability makes it particularly attractive during market turmoil. Unlike stocks that can be traded instantly, real estate involves significant transaction costs (4% stamp duty to enter, 2% to exit) creating what I call a "locomotive effect" – slow to start and stop, but steady in movement. This friction prevents the dramatic swings seen in equity markets. With central banks likely responding to market volatility through interest rate reductions, property stands to gain considerably, especially in segments that have underperformed recently like entry-level properties and strata units. After witnessing everything from recessions to global financial crises over my career, I've observed one consistent pattern: property always pulls through. Whether you're concerned about market volatility or looking for investment opportunities, understanding where money flows during uncertain times provides valuable insight for navigating today's complex financial landscape. Have questions about how these market shifts might affect your property decisions? Reach out – I'd love to share more specific insights based on your situation.
yep, yep mr trump is at it again, and how is it going to affect sydney property prices? In my opinion, as an agent of 32 years, we're going to talk about it right now. Station Right now.
Speaker 2:Stay tuned. Yeah, it's getting real Turmoil in the international markets. Stock markets, yeah, just markets in general. This is funny because we were just saying, like we have this conversation a lot with people. Sometimes you don't even know them and it's like the first thing that comes up.
Speaker 1:Well, yeah, we sort of could not have a conversation around this, because the reality is, when you're at an open house or when you're at a barbecue, like, it just comes up and people have their, have an opinion, um, reservations, um amused by it, um, and they do turn around and ask us, as real estate agents, something what are you seeing out there and how do you think it's going to affect you?
Speaker 2:yeah and you had a big conversation with a top solicitor who's again really exposed to a lot of different clients moving parts, and how did that conversation unfold?
Speaker 1:yeah, look, we had a bit of a debate yesterday because I was saying like there's been a bit of volatility. If you don't know, there's been a bit of volatility, if you don't know. There's been a bit of volatility in our market, in our stock markets around the world on the back of Trump's tariffs and how it's going to work and it seems to be the knock-on effect from that. And yesterday my conversation with a buddy of mine being a lawyer about town was, you know, he was feeling pretty bad about people losing, that had lost money in the stock market and my comment was for everyone that's lost money, there's someone that's made money. And we sort of had a bit of a debate around that because you know, my attitude is, every time that the stock market goes down, someone's taken their money out of the stock market and someone's got cash in their pocket, in their hand. And cash in the hand, in the pocket isn't really a clever thing.
Speaker 1:So a lot of people, when they take their money out of the stock market, they look at putting their money into another investment avenue and my comment yesterday was there's people that are seriously cashed up. I'm not, you know, yes, the stock market's down. Terrible for the people that are in, but the people that are out, um, I'm interested to see where they're going to put their money. Do they put their money into gold? Do they put their money under their under their pillow? Do they put their money into gold? Do they put their money under their under their pillow? Do they put their money into property, something more stable?
Speaker 2:Yeah, yeah, that transfer of wealth not just between individuals, but between asset classes. It's a shift.
Speaker 1:It's a look people got to understand. Money doesn't give, the energy doesn't get burnt or buried. Money doesn't get burnt or buried so much like the energy gets transferred, you've got to see where it's going to go. So when there's these transfers of energy, you've just got to be Johnny on the spot to work out where it's going to go, not freak out that it's gone. You know there's no use freaking out going. Oh my God, the stock market, that ain't going to help.
Speaker 2:It's working out where the money's gonna go and be there yeah, so it was in the news headlines all of last week. Australian stock market took the biggest hit out of probably all the big asset classes 35 billion dollars. Yeah, it's a lot, but I think it's a three and a half trillion dollar market, our asx, yeah. So, um, on the back of that, I think the quickest, the quickest asset class to see a bit of a spike was gold. I was talking to to a guy who was in that bullion industry and he said gold and silver's had a really good run of recent time. However, like property does take a while to trickle through. You're not gonna be able to record those profit and losses in such short time. It's just not as volatile.
Speaker 1:I've been observing property for 32 years now. That's all I've done my whole life. And you know there is always it's always a shit fest in the media. You know if it bleeds, it breathes and there is always something to be concerned about. There is always something to be spoken about. There's always something to be questioning what you're doing. And you know, whether it's COVID, whether it's a GFC1, a GFC2, whether it's a recession, I've seen them and I've felt them in property the whole time. And the one common denominator is just pull through to the other end. And the one common denominator is just pull through to the other end. And whenever I see the stock market and volatility in the market, it sort of starts in the stock market that tends to be the most fast reacting. The knock-on effect is property does better. So I'm excited about property doing better on the back of volatility. People seek stability.
Speaker 2:They get a property and it's like the stock market is first to be reported as well. It's the easiest to measure, so it hits the newspapers first and then it creates that bit of a ripple, a bit of a shock effect into the market, and then it takes a while to stabilise. So yeah, it is interesting is this comparable to anything else you've seen on sort of the scale, international scale?
Speaker 1:yeah, yeah, yeah, absolutely it's. It's. See, you know these, these, these net effects, you know not, not, they're not the tariff right, but but the net effect of, you know, volatility in markets, and then it hits the stock market. Yes, and that's the beauty of it, like if it was always going to be the same. I don't mean to say it's fun, but you know, if the market was always going to perform in an identical manner, there would not be news. There would not be news, um, there would not be.
Speaker 1:This is like you know it, just it, just always. It always does that. Like you know, people don't get on a, on a roller coaster just to go level and slow. Like you know, there's, there's the highs and there's the lows, and there's the thrills of the highs and there's the somberness of the lows. That's just. That's just what the markets do, um, and people, you know, sensationalize on the way up and they sensationalize on the way down, but it just feels like there's always this sensationalism but at the end of the day, um, I think, you know, with this tariff, tariff stuff, however, it actually works out. I don't, I'm not a political person, I don't really understand the net effects. I don't think anyone really does of what's happening at the moment? Uh, but certainly I'm not. Not an academic, but I know from 32 years of real estate what I see yeah, what you see on the ground.
Speaker 2:Quick comment, lisa novak the property market also has very different levels. There is entry level, mid-range and high-end luxury range. So the stock market does not have an effect on some of these levels whatsoever.
Speaker 1:It's like micro markets yeah, yeah, I just read that. You know. I think also the what people um realize about property and our property market is it's very expensive to trade in or out of it, so it makes the commodity a bit a bit like a locomotive train it's very hard to start and it's very hard to stop, but it does get faster and it does get slower. But I think you know the stock market and what we're seeing now very different. You know you can literally, by going like that, you can literally sell all of your all, all of your stocks. And you know, with property it's not like that.
Speaker 1:You think about it a lot because it costs you four percent, you know, in stamp duty, just to get in and it costs you two percent just to get out and then you got your taxes associated with that and your time. So I think it's a much more stable environment to be in. So the net effect we're going to see from. If I was a betting man and we are recording this if I was a betting man, I would say that I reckon the stock, the property market, with rate reductions. They very quickly started bringing up when they saw the stock market shit the bed and the tariffs happen. I think the property market's going to be a big winner, but I think it's going to be a big winner in the markets that have underperformed. The markets that have underperformed have been entry-level properties, strata in particular it's good insight.
Speaker 2:Jeff hughes, good morning. The direction to real estate rise or fall is employment, so let's see what the tariffs will affect. Mining china stops our property loans cash flow you know what?
Speaker 1:it's been a very good property market the last hundred years and it's going to be a very good property market the next hundred years is that something to sign out on?
Speaker 2:we're signing out on that one, on that one. Have a great week.
Speaker 1:have a great day. Thanks, bill. Have a great day everyone. Hopefully this helped people out there to talk what we, what we're seeing in the marketplace love, love you, see you, bye, see you, mate, cheers.