News By Tag
News By Location
Just Released Real Estate Investment Outlook
To try to project the outlook for real estate investments, it is important to see where the US economy is heading after the slowdown. The US economy is still enjoying solid growth.
By: CENTER FOR REAL ESTATE STUDIES
The US-China trade conflict that resulted into a full-blown trade war remains the biggest risk for the US. China and the US have started negotiations to resolve the current trade dispute, and the US government has decided to suspend further increases in tariffs on $200 billion-worth of Chinese goods. There are initial signs from both sides that China and the US may find a resolution to avoid a further escalation.
An agreement still requires a high degree of give and take from both parties. This is mainly because the US is demanding that China address issues on technology transfer and intellectual property theft. However, beyond bilateral protectionism, there remains a risk that trade conflicts will escalate, to the extent that it would have adverse effect on the real estate investment developments. Currently, the biggest risk emanates from threats by the US president, Donald Trump, to impose additional tariffs on imports of EU cars
In addition to the trade war, there are many good reasons to believe that the potential value of the US dollar is rather limited. The US is running a twin deficit with a minus of 2.4%, the net international financial position - the value of US assets less the value of US liabilities – stands at -10,000 billion dollars, or at around 60% of nominal GDP, according to the US Bureau of Economic Analysis.
The US economy is still forecasted to do relatively well, as near-record low unemployment is helping to drive steady wage growth and private consumption, despite the fact that businesses in the US have expressed concern that trade protectionism is raising import costs and weakening their external competitiveness, and the real estate investment markets. Therefore, an agreement about future trade between the US and China is of paramount importance to continue performing well.