Brexit prop­erty mar­ket ef­fect

Whitsunday Times - - REAL ESTATE -

BRI­TAIN has voted to leave the Euro­pean Union in a shock ref­er­en­dum re­sult that will see the UK break from the Con­ti­nent af­ter more than 40 years.

While the for­mal exit will take two years, the ef­fects of the re­sult are al­ready be­ing felt, with fi­nan­cial mar­kets fall­ing across the globe.

The im­pact of Brexit will likely have flow-on ef­fects for Aus­tralia, in­clud­ing the prop­erty mar­ket. What does Brexit mean for Aus­tralia? Aus­tralia now looks even more at­trac­tive rel­a­tive to Europe. Although the exit was not en­tirely un­ex­pected, it does add to un­cer­tainty in the Euro­pean Union, and in Bri­tain.

– the Euro­pean Union has made it eas­ier for peo­ple to travel across Europe look­ing for work.

Aus­tralia at­tracts a lot of global cap­i­tal, par­tic­u­larly for com­mer­cial prop­erty, and in many cases would be com­pet­ing for this cap­i­tal for lo­ca­tions within Europe.

Aus­tralia con­tin­ues to have a high de­gree of sta­bil­ity, eco­nomic growth and low sov­er­eign risk. It has a rep­u­ta­tion as be­ing a safe haven and this will be more the case now, with what is hap­pen­ing in Europe.

Will Brexit ef­fect the prop­erty mar­ket?

Our res­i­den­tial sec­tor is also likely to be im­pacted. Lon­don is one of the main des­ti­na­tions for Asian prop­erty buy­ers. Again, this un­cer­tainty may lead them to look at other des­ti­na­tions such as Aus­tralia. Aus­tralia is go­ing to be seen as in­creas­ingly safe, par­tic­u­larly com­pared to this volatile en­vi­ron­ment.

Me­dia com­ing out of Bri­tain sug­gests that the prop­erty mar­ket in Lon­don will be turned up­side down by the exit. Whether this even­tu­ates is un­cer­tain.

Longer term, it is pos­si­ble that mi­gra­tion lev­els will be re­duced – the Euro­pean Union has made it eas­ier for peo­ple to travel across Europe look­ing for work. Bri­tain may miss out on this free flow of labour that it cur­rently en­joys, so eco­nomic growth may be im­pacted.

What is the cost to the UK of leav­ing the EU?

Per­son­ally, I don’t think it is a good idea for Bri­tain to have ex­ited. I think the ram­i­fi­ca­tions will be largely neg­a­tive, par­tic­u­larly to their econ­omy. Will the rest of Europe still want to trade with them? Will it still ben­e­fit from lower cost labour from Eastern Europe?

Will peo­ple in­vest­ing see it now as a closed off mar­ket? – Nerida Con­is­bee, realestate.com.au

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