The state of the (property) union
Published date | 03 April 2018 |
Pages | 230-231 |
Date | 03 April 2018 |
DOI | https://doi.org/10.1108/JPIF-02-2018-0010 |
Author | Nick French |
Subject Matter | Property management & built environment,Real estate & property,Property valuation & finance |
Editorial
The state of the (property) union
America is a nation of builders. We built the empire state building in just one year –isn’t
it a disgrace that it can now take ten years just to get a permit approved for a simple road?
(President Trump –State of the Union Speech, 30 January 2018).
Introduction
I know that when it comes to speaking about President Trump, it is very difficult to
disengage from the partisan rhetoric. And on many levels, I fully understand the
sometime vitriolic distrust of the man; but in this editorial, I want to move away from the
political fervour and actually look at what his presidency means to the USA and world
property markets.
So I am writing this note the day after the 2018 State of the Union speech. As a Brit, it
may seem odd that I would choose to spend a few hours listening to his speech live but, more
than ever in this new world of uncertainty, what happens in America impacts upon other
nations around the globe. And that impact affects our property markets.
America around the world
As we rebuild America’s strength and confidence at home, we are also restoring our strength and
standing abroad (President Trump –State of the Union Speech, 30 January 2018).
There is always a risk of “fake news”in the statistics produced but clearly the US stock
market is a proxybarometer of the robustness of the USA.As I write, the Dow Jones Index has
risen nearly 8,000points since Trump’s election. Aswith any such unrelenting rise, therewill
be a readjustmentsoon particularly if interestrates rise (part of the boom is riding the waveof
cheap money) but overall the US markets have welcomed Trump’s stewardship. This has
been reflectedin similar, albeit not as record breakingrises, around the world. And, againas a
generalisation, property markets do well when their stock markets are strong.
America’s infrastructure
Together, we can reclaim our building heritage. We will build gleaming new roads, bridges,
highways, railways, and waterways across our land (President Trump –State of the Union Speech,
30 January 2018).
I doubt that it will have escaped your attention that Trump is branded as a monetarist in the
mould of Regan. A president that believes that the economy is guided, if not controlled, by
the government’s restriction or expansion of the money supply. Yet, if you look at Trump’s
pillars of the economy, he and his advisors have relied heavily upon the Keynesian tenet of
government intervention to stabilise and stimulate the economy. The Trump edict for
rebuilding America by investing in new infrastructure projects (including the wall) has
stimulated GDP with rises of 3 per cent per quarter for the end of 2017 with corresponding
low unemployment rates. And whilst there is a misconception that Friedman and Keynes
had diametrically opposing ideas, it does flummox many commentators that Trump should
be pumping money into the US economy at the same time as extolling the virtues of the
corporate economy. But, whatever the reality, in the short and medium term, this is good
news for the construction and real estate industries.
Journal of Property Investment &
Finance
Vol. 36 No. 3, 2018
pp. 230-231
© Emerald PublishingLimited
1463-578X
DOI 10.1108/JPIF-02-2018-0010
230
JPIF
36,3
To continue reading
Request your trial