PETALING JAYA (Nov 10): International real estate consultancy Knight Frank expects investors to focus on safe haven assets, such as property, amidst market volatility due to increasing uncertainties after the US presidential election, according to Knight Frank Asia Pacific head of research Nicholas Holt.

The election of Donald Trump as the next US President had seen significant impact on the Asia-Pacific region’s currency and equity markets on Wednesday.

Holt noted that the rising uncertainties in the global economy will lead to a rush towards safe haven assets.

“Along with gold and triple-A rated government bonds, prime real estate in key global city markets is likely to see an uptick in interest,” he said in a statement today.

From the perspective of cross-border real estate investors, Holt said investors’ concerns over the US could spur increasing amounts of interest into markets such as Australia, Japan and Europe.

The intrinsic qualities of property — that in times of uncertainty it acts as a safe haven, and in times of economic expansion benefits from rental and capital growth — mean that despite all the uncertainty of 2016, real estate markets will continue to be active with prime assets in the world’s most resilient cities remaining in significant demand.

Meanwhile, Knight Frank partner and chief economist James Roberts said with equities and bonds set to see a rollercoaster ride, and fluctuations in currency values creating opportunities for those willing to invest across borders, prime real estate in safe haven markets will be in demand among investors.

“In the global economy, there is now huge pressure on investors to ‘park’ money until stability returns, which is tearing up the rule book on pricing. Trump’s election will extend this trend,” he explained.

In the near term, Knight Frank Australia head of research and consulting Matt Whitby anticipates short to medium-term uncertainty in financial markets, capital markets and property markets.

“Hence, we may see some plateauing in commercial and residential price growth, and indeed some downward pressure, over the coming [weeks] leading into Christmas,” he added.

Amidst gloomy near term outlook, Knight Frank believes there are opportunities for global property investors to explore and the US will remain attractive in the long run.

“The business environment in the US and innovation in business services and technology providers based in the US have helped to drive property demand globally — it is an incredibly strong platform to build from,” said Knight Frank global head of research Liam Bailey.

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