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Real Estate - Impact of U.S. Election

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With Trump’s election victory, the policy backdrop for the economy and commercial real estate will likely change. Although the time frame and degrees of change are uncertain, we believe there are certain policy items to consider.

Overseas, the immediate market reaction during the election showed a sharp sell-off in the futures market. However, when the election ended, that sentiment was reversed, reducing the risk of any acute near-term disruption to either the economy or real estate markets. Furthermore, with Republicans having retained control of Congress, it is reasonable to assume that the President-elect has a chance to implement some – perhaps most – of his agenda
over the course of his term, although checks and balances remain.

For example, it is important to note the Republican Party did not walk away with a landslide mandate. While Donald Trump won the Electoral College vote, Secretary Clinton won the popular vote. Also, Republicans are likely to lose at least one seat (Illinois) and possibly two, declining from 54 to 52 seats. President-elect Trump has stated he wants to repeal the Affordable Care Act. While he can take certain executive actions, it would require 60 votes in the Senate to overcome a filibuster and actually repeal it. Finally, within the Republican Party, there will still be some divisions. For example, groups such as the Freedom Caucus are likely to take a hard line on raising the deficit ceiling which could serve to limit some of the fiscal stimulus proposed by the Trump campaign.

Source : Deutsche Asset & Wealth Management

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