How Donald Trump’s second term could impact the international property market

Donald Trump’s historic second term as US President is likely to affect not just housing in the US but property investment worldwide. From tax cuts and tariffs to immigration and foreign policy, Trump’s actions in office could ripple out across the global market.

The new US President’s first days in office have already been eventful, with Trump signing a flurry of executive orders and triggering market volatility.

There’s a level of ongoing unpredictability around Trump’s policies and their impacts, and some measures may counteract others. However, we can still analyse proposed policies and look back on Trump’s first presidential term to see how a second term could affect the international real estate market.

Trade policies and their ripple effects

Trade has been a major focus in recent weeks, with Donald Trump threatening to impose significant tariffs on both trade partners and rivals. Although Trump has shown restraint since taking office (bringing relief to markets) there are still fears that trade wars could disrupt global supply chains and investment flows.

Countries heavily reliant on trade with the US – or global trade more broadly – could experience economic strain, leading to a reduction in disposable wealth and, consequently, dampened demand for foreign property from these regions.

For instance, the US accounts for a significant portion of exports from Mexico and Canada (around 77% and 75%, respectively), so tariffs on these two countries could hit their economies hard. There may be reduced Mexican property investment in neighbouring countries or popular overseas markets such as Spain. Similarly, there could be a decline in Canadian investment in US vacation properties, particularly in popular states such as Florida and California.

China is another country that could be significantly impacted. Trump has now stepped back from his proposed 60% tariff on Chinese imports (which economists at UBS said could lower Chinese GDP by 2.5 percentage points over the next 12 months) and instead signalled a much lower 10% tariff. However, this could still potentially dent Chinese demand for property in North America, Australia and Europe – particularly if Trump chooses to increase the tariffs in the future.

Meanwhile, if Trump strikes more favourable agreements with other countries – such as the UK or Japan – then this could facilitate mutual property investment between those countries and the US.

Global interest rates and currency dynamics

Another potential impact of Trump’s tariffs is that they could push up inflation in the US. In response, the Federal Reserve and other central banks around the world may cut interest rates at a slower pace in 2025 – as Fed Chair Jerome Powell warned following the bank’s December policy decision.

Higher mortgage rates might dampen demand for mid-market properties globally, as would-be buyers are hesitant to take on loans. However, luxury markets – which are often cash-driven – may be relatively unaffected.

Furthermore, the US dollar could benefit from higher US interest rates, as well as Trump’s protectionist policies and safe-haven demand amid global uncertainty. The potential strength of USD could make US properties more expensive for international buyers but increase American interest in overseas investments.

However, not all economists are sure that Trump’s tariffs will prove inflationary, particularly on a global scale. If China responds to US tariffs by cutting its prices for European buyers, essentially exporting deflation, this could help to lower European interest rates, perhaps leading to an increase in mortgages and property market activity.

Immigration and emigration

Trump’s hardline stance on immigration could also impact the US housing market for domestic and foreign buyers. The President declared a border emergency upon taking office and has already taken steps to enact his policies, such as deploying troops to the US-Mexico border.

Stricter immigration laws could have a mixed impact on different regions and markets. For instance, a clampdown on student visas could deter some foreign buyers or affect investors leasing student accommodation. Meanwhile, luxury and vacation properties may be unaffected.

Some Americans may also choose to leave the US. Emigration queries spiked when Trump was first elected in 2016. Similarly, after Trump's 2024 re-election, there was a significant increase in Americans researching emigration options. Google searches about moving to Australia, Canada and New Zealand surged by 820%, 1,270% and nearly 2,000%, respectively.

While these searches did not lead to a significant increase in actual relocations, there is still the possibility of increased emigration over Trump’s second term. American society is deeply divided, and those who are unhappy with the current administration may seek to move elsewhere – potentially buying property in popular expat destinations.

Negative net migration could free up housing stock and deflate prices in the US, particularly in areas with traditionally high immigrant populations. However, it could also impact construction and therefore restrict the supply of new housing.

Tax cuts and deregulation

Economic policy under the Trump administration could boost the US economy. This in turn could spur the domestic market, and potentially attract high-net-worth individuals from overseas.

Tax cuts – including new measures and a likely extension to the Tax Cuts and Jobs Act (TCJA), implemented by Trump in 2017 – could also benefit property investors and owners, fuelling real estate activity and incentivising investment. These will likely primarily benefit businesses and high-income and -wealth individuals.

Furthermore, deregulation around development and the environment could make it easier for developers to obtain permits – potentially boosting home construction – and further spur economic activity overall.

Domestic housing supply

The housing supply across the US is currently uneven. Some states, such as Texas and Florida, have a surplus of housing stock. Others, such as Illinois, have lagged behind with housebuilding over the past few years.

If Trump’s tariffs inflate the costs of imported construction materials, then this could further impact housebuilding and exacerbate the existing mismatch in housing stock across the US.

As a result, the US could have a K-shaped housing market, with house prices going up in some areas and down elsewhere. This again could influence where foreign property investors or buyers may choose to purchase.

Geopolitical tensions and global stability

As part of his election campaign, Donald Trump vowed to end the war in Ukraine. Trump has signalled that he could cut military and financial aid to Kyiv, and his administration is arranging a call with Russian President Vladimir Putin to discuss the possibility of peace.

Although Ukraine has said it will not cede any territory to Russia, Kyiv could be forced to compromise if the US scales back its support. Meanwhile, Trump has threatened Russia with fresh sanctions and tariffs if a deal is not reached.

Trump has also said he wants peace in the Middle East. Israel and Hamas agreed a Gaza ceasefire deal, which came into effect the day before Trump’s inauguration, but the uneasy peace is currently hanging by a thread. Although Trump is staunchly pro-Israel, his administration currently seems committed to ensuring the current ceasefire is upheld by both sides.

If the Hamas-Israel agreement holds and Trump manages to broker a Russia-Ukraine deal, we could see increased travel and investment activity in the Middle East and Eastern Europe. Real estate and tourism tend to rebound following conflict resolution, as pent-up demand is released.

However, Trump’s aggressive diplomatic style could potentially further destabilise the global geopolitical situation. He has expressed interest in the US acquiring Canada, Greenland and Panama, while refusing to rule out the use of military or economic force to obtain the territories. And Trump’s anti-China stance is set to further strain relations between Washington and Beijing.

Furthermore, the situation in the Middle East remains delicate, and a misstep could risk escalating the regional conflict, rather than resolving it.

Ongoing geopolitical risks over the next few years could trigger a flight to safety, potentially driving property investors to traditionally stable property markets like Switzerland, Germany or the UK.

Climate policies and sustainable housing

A key campaign pledge of Donald Trump’s was to roll back green regulations and subsidies for sustainable energy and technology, and he wasted no time fulfilling that pledge.

For the global housing market, this could mean decreased demand in areas at risk from climate change, such as low-lying coastal and weather-prone regions.

In the US, an unwinding of green investment incentives could see developers deprioritise sustainable features due to higher upfront costs. The supply of sustainable housing may dwindle, while the cost rises.

This could also lead to further regional disparities. Locations such as California may continue to push green housing standards, perhaps offering state funding for sustainability projects, creating a patchwork effect where sustainability advances regionally rather than nationally.

Uncertainty ahead

It seems certain that Donald Trump’s second term will affect the global property market – whether it’s higher interest rates worldwide, an increase in Americans buying overseas, or an influx of high-net-worth buyers capitalising on a favourable tax regime in the US.

However, huge uncertainty remains. Trump’s approach to politics is often unpredictable, and the impact of his policies also depends on how his allies, competitors and rivals react.

Whatever happens, it should be an interesting four years for the US and global housing markets. We’ll be keeping a close eye on the policies Trump implements and how other world leaders respond.

In the meantime, if you’re a property professional or investor – or if you’re simply buying or selling a property abroad – we can help to simplify the payments process and ease some of the uncertainty. Speak to an expert at Redpin to find out more today.