Trump’s Second Term: A Game-Changer for U.S. Property Professionals?
As Donald Trump assumes the presidency for a second time in January 2025, his administration’s policies are poised to bring significant changes to the U.S. property market. With proposals ranging from deregulation to tax reforms, industry professionals are closely examining how these initiatives will play out in the months ahead. World Property Business Club has an increasing number of property agents based in the USA, and many across other nations working closely with them.
Deregulation to Boost Housing Supply
The Trump administration has reiterated its commitment to reducing regulations in the housing sector, aiming to cut construction costs and increase supply. This includes plans to open more federal land for development and promote suburban expansion. While these measures could help alleviate housing shortages, their success will depend on alignment with local market conditions and demand. However, previous deregulatory efforts faced significant judicial hurdles, with many rescissions voided by the judiciary. (Source: Brookings)
The National Association of Realtors (NAR) has expressed cautious optimism about these measures, noting that deregulation could ease supply-side pressures in the housing market. However, they emphasize the importance of balancing growth with sustainability and affordability to ensure long-term market health. (Source: NAR)
Immigration Crackdown and Its Ripple Effects
A renewed push to curb illegal immigration could have mixed repercussions for the property market, writes Propomodo. On one hand, reduced immigration might ease demand for housing in certain areas. On the other, labour shortages in the construction industry—already strained in many regions—could worsen, driving up building costs and slowing down development projects. The construction workforce has increasingly relied on immigrant labour, with immigrants comprising a record high of 24.7% of the workforce as of 2022. (Source: propmodo.com)
Tariffs Threaten to Raise Construction Costs
CRE Daily notes that trade policies are back in focus, with Trump signalling a tougher stance on tariffs for imported materials like steel and aluminium. While intended to protect domestic industries, these tariffs could increase costs for developers, potentially translating into higher home prices and reduced affordability for buyers. Proposed tariffs on Canada and Mexico could significantly increase the cost of imported construction materials, exacerbating already high home prices. (Source: CRE Daily). Also NAR has raised concerns about the impact of rising construction costs on housing affordability, highlighting that tariffs could further strain an already tight housing market. (Source: NAR)
Infrastructure Spending to Lift Property Values
Trump’s focus on large-scale infrastructure projects, from transportation to public facilities, is expected to have a positive impact on property values. Improved infrastructure typically enhances the appeal of surrounding areas, attracting both residential and commercial development. Oxford Economics is cautioning that the construction sector may face significant headwinds due to policies on immigration and trade, which could lead to higher input and labour costs, potentially offsetting some benefits of infrastructure spending. (Source: Oxford Economics).While NAR has applauded infrastructure spending plans, suggesting these often lead to higher property values, they also caution that successful implementation will require careful coordination with local governments and stakeholders. (Source: NAR)
The Road Ahead
Trump’s second term promises to bring both opportunities and challenges to the U.S. property market. From potential growth fuelled by deregulation and infrastructure improvements to hurdles like rising construction costs and labour shortages, the industry must remain vigilant. For property professionals, staying informed and adaptable will be key to navigating this evolving landscape.