While trump continues to burn world trade into dust, you will NOT believe what it’s doing to the value of your property.

I’m sure by now the full weight of the Trump tariffs on everything are front page news.

And I’m certain too, if you are a stock investor or trader, it’s been quite a volatile ride recently.

Of course, the noise will have been dialed up also by a ravenous media for who “if it bleeds, it leads” take on news would ensure maximum coverage of it all.

There just doesn’t seem to be any good news out there right now for our economy.

Au contraire.

Savers aside, this would be absolute sweet music to the ears of current mortgage holders or those hoping for a break to make their own dream of home ownership achievable.

So, let’s look now at this.

Is it possible that we have an antidote to those calling for a huge recession to occur imminently thanks to these tariffs?

What does the 18.6-year Real Estate Cycle have to say about it?

Are we witnessing the end of the current cycle, or is much more to come?

Time to find out.

Markets are increasingly confident the Reserve Bank of Australia will cut the cash rate in May and up to another three times after that, as economists predict US President Donald Trump’s tariffs will cause a global slowdown that will spill over to the Australian economy.

The above was the lead paragraph from the above article.

Of course, fears over slowing growth naturally led to pressure upon central banks to react. You don’t want a situation where rates are rising in the face of a contracting economy – that’s stagflation.

You can also bet this is a problem all countries face, not just Australia. AMP chief economist Shane Oliver said the tariffs were worse than markets expected. For Australia, the new trade barriers were more likely to cause growth to slow than for inflation to rise, adding to the case for more RBA interest rate cuts, he said.

“Given the even bigger threat to global growth, it looks like share markets will have a further leg down,” Oliver said.

“Our assessment remains that shares will have a 15 per cent plus correction measured from this year’s high … and eventually the Fed will likely respond with rate cuts, although this may be delayed given US tariffs will also add to US inflation.”

Well, the call for share market falls has been spot on. We have witnessed the biggest single day fall in US equities since March 2020, the covid lockdown year. Note also a 60-month repeat.

Which causes further falls globally.

Speaking specifically about Australia; markets now ascribe an 82 per cent chance the RBA will cut the cash rate to 3.85 per cent at its May 20 meeting, up from a 70 percent chance before Trump’s announcement.

Traders expect three to four rate cuts this year in total, potentially taking the cash rate to 3.1 per cent.

And that brings us back nicely to the “bad news is good news” dynamic here.

Because, as I have written to you over many months and years now, the expectations during the final few remaining years of the current real estate cycle were for land prices to do – what? Yes, go higher!

The real estate cycle always finds a way to complete it on time. The many drivers behind this aren’t always so obvious but if you know what you’re looking for, and can apply some patience, the answers will come.

And so, dear reader, you tell me. What do you believe will happen to land prices both in Australia and across the world should a coordinated and synchronized interest rate cut campaign play out?

One aspect of the land market I haven’t written enough about to you is measuring the turning of the real estate cycle by tracking the increase in apartment sales.

Specifically, by following how much the price per square meter is tracked.

As the headline above states, the price for apartments in Australia’s tier 1 cities have recorded a record jump higher. And this is a trend I noticed myself during my recent trip to Canada.

There is a fundamental change in how buyers are now viewing apartments. Not as simply an investment vehicle, but as a preferred option for owner-occupiers.

Now, there are layers to that. It speaks more to the unaffordability of the more traditional detached/semi-detached houses that owner occupiers would like to buy.

And you need to live somewhere, right? This is what the above article is alluding to.

The leap was the biggest in a decade of data… the average price of presales and under-construction projects across Sydney, Melbourne, Brisbane, Perth and Gold Coast was also up 34 per cent year-on-year and was driven by demand in Brisbane, where off-the-plan prices leaped 33 per cent from the third quarter to $23,000.

But there is another driver behind the increase in per square meter price rises.

Which the article alluded to. Bolded text is my own.

But getting buyers willing to pay more to ensure new projects go ahead – particularly at the lower and mid-range markets – is a problem.

Daniel Faigen, a director of developer Hirsch & Faigen, recently lodged plans for a 31-storey, 100-unit tower at Gold Coast’s Broadbeach… Hirsch & Faigen will sell apartments in the Marbella Broadbeach tower for between $18,000 and $20,000 per square metre. Sales below that rate didn’t stack up, Faigen said.

The only way to make developments this late in the cycle stack up, here in Australia and globally too, is to build as high as legally possible and pressure would-be buyers to accept higher per meter costs to secure one.

Which means you have to borrow that much more to afford it.

And with a federal election in Australia in a few months from now, both the incumbent and opposition are promising help for home buyers.