Invest
Fund manager tips two markets ‘most exposed’ to Brexit
The historic Brexit referendum last week saw Britain vote to leave the EU – but what does it mean for these two major real estate markets where foreign investor activity is concentrated?
Fund manager tips two markets ‘most exposed’ to Brexit
The historic Brexit referendum last week saw Britain vote to leave the EU – but what does it mean for these two major real estate markets where foreign investor activity is concentrated?
Brexit sparked global market volatility, sending the British pound plummeting to its lowest point against the US dollar since 1985. The ASX fell by almost 4 per cent the day the result came in. The market reaction was extreme. However, the question now is when balance will be restored and what lasting impacts the fallout could have on the Australian economy.
T. Rowe Price portfolio manager for European equities Dean Tenerelli predicted a protracted period of uncertainty – not only in UK and European financial markets, but globally.
"Markets do not like uncertainty," Mr Tenerelli said.
According to Professionals Real Estate Group CEO Shane Kempton, property investors are the most influenced by negative global sentiment.
"The most exposed sector to any international negative repercussions will be the apartment market where investors own 57.8 per cent of units in Victoria and 49.6 per cent of units in NSW," Mr Kempton said.
"Property investment activity has been very strong in areas such as Victoria and NSW over the past three years and this has resulted in surging property prices in Melbourne and Sydney.
"Many of these investors in Sydney and Melbourne have been from overseas."
In contrast, investors only own 29.6 per cent of units in Western Australia, according to Mr Kempton.
"In Perth, very few international property investors have been active in recent years.
"Indeed, a silver lining of the global uncertainty is that the Western Australian property market may benefit from investor uncertainty in the eastern states who may now decide it is a good time to invest in WA."
Meanwhile, AMP Capital’s Shane Oliver said the Leave victory is unlikely to plunge the UK or Europe into an immediate recession, and the main impact in Australia will be on financial markets.
"This could affect short-term confidence and may add to the case for the RBA to cut interest rates again, particularly if banks increase their mortgage rates out of cycle due to higher funding costs flowing from an increase in lender caution," Mr Oliver said.
"That said, we expect the RBA to cut rates again anyway."
ANZ’s Australian Markets Weekly report reflected a similar sentiment.
"Our initial expectation is that the Reserve Bank will be in wait-and-see mode to judge the extent of the volatility, but increased uncertainty will place pressure on the bank to cut rates if it spills over to consumer and business confidence," ANZ said.
Stock market
Aussies flock to fixed interest and ETP products for stable returns
Investors seeking stability during the COVID-19 pandemic have turned to fixed interest and cash exchange-traded products, new research has revealed. ...Read more
Stock market
Emerging market equities gain traction in post-pandemic world
Emerging market equities are making a comeback as technology-savvy consumers flock to capitalise on new opportunities that the 2020 pandemic may have made too attractive to ignore. ...Read more
Stock market
Is it too late to start investing in market index ETFs?
With the Australian market recovering its losses since the pandemic began, nestegg asked an industry expert if it was too late for investors to begin their investing journey. ...Read more
Stock market
Is it time to buy reopening stocks?
Investors are being advised to look into stocks that could benefit from markets reopening, an analyst has stated. ...Read more
Stock market
Stocks to watch in 2021
Easing political uncertainty, new vaccine hopes, central bank’s willingness to do all it takes and more, and new stimulus packages are likely to act as tailwinds for investors, an analyst has said. ...Read more
Stock market
Australia’s October stock picks revealed
Australian retail investors piled predominantly into high-growth industries such as electric vehicles stocks, cloud computing and recent third quarter IPOs during the month of October, new research ha...Read more
Stock market
The US election created a ‘goldilocks scenario’ for financial markets
As the votes continue and the results are collated, the US election is increasingly likely to create a “goldilocks scenario”, an industry expert has said. ...Read more
Stock market
How a Democrats sweep could benefit the Australian market
As Americans go to the polls, a Biden victory could help Australia’s sharemarket, an investment bank has revealed. ...Read more
Stock market
Aussies flock to fixed interest and ETP products for stable returns
Investors seeking stability during the COVID-19 pandemic have turned to fixed interest and cash exchange-traded products, new research has revealed. ...Read more
Stock market
Emerging market equities gain traction in post-pandemic world
Emerging market equities are making a comeback as technology-savvy consumers flock to capitalise on new opportunities that the 2020 pandemic may have made too attractive to ignore. ...Read more
Stock market
Is it too late to start investing in market index ETFs?
With the Australian market recovering its losses since the pandemic began, nestegg asked an industry expert if it was too late for investors to begin their investing journey. ...Read more
Stock market
Is it time to buy reopening stocks?
Investors are being advised to look into stocks that could benefit from markets reopening, an analyst has stated. ...Read more
Stock market
Stocks to watch in 2021
Easing political uncertainty, new vaccine hopes, central bank’s willingness to do all it takes and more, and new stimulus packages are likely to act as tailwinds for investors, an analyst has said. ...Read more
Stock market
Australia’s October stock picks revealed
Australian retail investors piled predominantly into high-growth industries such as electric vehicles stocks, cloud computing and recent third quarter IPOs during the month of October, new research ha...Read more
Stock market
The US election created a ‘goldilocks scenario’ for financial markets
As the votes continue and the results are collated, the US election is increasingly likely to create a “goldilocks scenario”, an industry expert has said. ...Read more
Stock market
How a Democrats sweep could benefit the Australian market
As Americans go to the polls, a Biden victory could help Australia’s sharemarket, an investment bank has revealed. ...Read more
More articles
Website Notifications
Get notifications in real-time for staying up to date with content that matters to you.
