Brexit will boost Australia’s residential property market as the UK decision to leave the European Union will increase perceptions of the market’s safe-haven status, observers say.

 

Nerida Conisbee, the chief economist at REA Group, shrugged off a question that uncertainty created by the UK’s vote to leave the 28-nation EU bloc would impact the Australian property market.  If anything, it would boost demand for Australian real estate assets.

 

“If you’re a pension fund in Europe, and you’re looking at London or you’re looking at Australia, then all that turmoil makes Sydney or Melbourne look like a great investment,” she says.

 

Property markets typically suffered large, sudden falls only after large macroeconomic events such as a surge in unemployment or drop in economic growth and neither of these was likely. “Overall, I’m pretty optimistic about Australian property,” she says.

 

The referendum result will create an opportunity for markets seen to offer more stability, but nothing will happen straight away, says Chris Mourd, LJ Hooker’s head of real estate.

 

“The reality is there isn’t going to be an immediate impact to Australian property,” Mourd says. “What you’re probably going to see is the investor saying, ‘We want to go somewhere we can project out over the next few years and with some level of stability’.”

 

Falling prices of equities and other more liquid investments would also prompt local investors to take another look at real estate, he says.