Donald Trump as US president may be a frightening prospect for the world, but his election is very good news for the real estate sector, delegates heard at the Autumn Conference organised by the Commercial Real Estate Finance Council (CREFC) in London this week.
'Whatever you may think of him, the reality is that Trump is very good for our business, for finance and for banks, as Wall Street’s reaction to his election shows,' said Lisa Pendergast, newly appointed executive director of CREFC. 'There are concerns about some of the things he is suggesting, but we are happy with lower taxes and deregulation.'
Republicans usually are more favourable to the real estate industry than Democrats, and the fact they now control the Senate and the House of Representatives means that reforms can be implemented swiftly. Industry insiders expect corporate tax reform and possibly financial services reform in the next 18 months, before the elections to renew Congress.
The feeling among real estate veterans is that the property tycoon is ‘one of us’ who understands business and what it needs to thrive. 'The expectation is that there will be less regulation,' said Pendergast. 'Regulations have crippled business, trading is impossible, and you are not doing pensioners any service if you cannot invest.'
The Trump presidency will also have the positive effect of prolonging the real estate cycle, said Pendergast: ‘The cycle was getting long in the tooth in the US, especially multi-family which is close to being oversupplied. Now after the election I think we are likely to see a longer runway. The cycle will be extended.’
A more business-friendly regime will also encourage international capital flows, said the CREFC Executive Director: 'I am convinced that both domestic and Asian investors will continue to put money into US real estate.'
Some of Trump's proposals are risky, said Pendergast: ‘He is eager to build infrastructure, but it is dangerous because it is money we don't have. His position on international trade could be really damaging. But I am convinced that Trump the president will be more pragmatic and less controversial than Trump the campaigner.’
