Donald Trump has secured the necessary electoral votes to secure a second term, raising questions about how his presidency will influence real estate markets in Europe and CEE.
The upcoming CEE Property Forum, scheduled for November 25–26 in Vienna, will address these issues. Senior U.S. experts will discuss the potential economic implications of Trump’s second term, while top investors, bankers, and developers will examine how the U.S. election outcome might reshape the real estate landscape in Central and Eastern Europe.
According to research by Erste Group conducted prior to the election, CEE economies may face challenges under Trump’s leadership, especially due to the possibility of new trade tariffs. The region, economically linked to Germany, would likely be affected indirectly by any U.S.-Germany trade conflicts, should Trump follow through on his tariff promises.
Donald Trump has often advocated for tariffs of 10% on all imports and up to 60% on Chinese imports. His previous tariffs on China, along with potential future tariffs, could disrupt global trade flows. While the EU does not directly compete with China in U.S. markets, increased tariffs could intensify trade tensions, indirectly impacting CEE economies by discouraging investment and raising uncertainty.
Predicting the full impact of a second Trump presidency is challenging, but increased uncertainty seems likely in three key areas: international trade, the Ukraine conflict, and the green transition. Such uncertainty could slow decision-making in CEE real estate markets.
Hungary and Slovakia most exposed to U.S.
For CEE economies, exports to the U.S. represent a relatively small portion of their trade. Slovakia and Hungary are the most exposed, with U.S. exports accounting for 4.5% and 3.8% of their total exports, respectively.
Germany is a primary trading partner for CEE countries. With the potential negative economic fallout from the U.S.-China trade wars impacting Germany’s economy, CEE nations would be vulnerable to knock-on effects. Czechia and Romania, in particular, are highlighted as likely to see reduced GDP growth due to their strong economic linkages with Germany’s manufacturing sector.
A renewed trade conflict would also generate significant uncertainty for companies, likely causing delays in investments. This ripple effect would impact multiple economic sectors, with the indirect effects on the Eurozone economy potentially surpassing those from direct trade flow disruptions.
Moreover, Trump's stance on NATO burden-sharing could pressure CEE countries to increase defence spending. Poland, already a leading NATO supporter with elevated defence budgets, may bolster its defence investments. Conversely, nations with lower defence spending might face reduced U.S. security support, posing regional security concerns.
Trump’s intent to reduce U.S. aid to Ukraine could shift the burden to European allies, leading to increased defence and humanitarian spending for CEE nations. This shift could stretch regional budgets, with Romania and Poland already key NATO and Ukraine support hubs.
Trump’s energy policies emphasize fossil fuel production, potentially conflicting with the EU’s green transition goals. This may create additional pressure on CEE economies reliant on fossil fuel exports or imports, potentially slowing their green energy transitions if U.S.-Europe energy relations were strained.
Impact on real estate
"The election of Donald Trump could have several impacts on the European real estate market. Trade protectionism might lead to higher tariffs on European goods, increasing the cost of construction materials imported from the USA, such as steel, wood, and insulation products. This could raise the overall costs of residential and commercial construction in Europe. Additionally, protectionist policies could restrict the flow of investments and technological innovations between the USA and Europe, potentially slowing growth and innovation in the European real estate sector. Geopolitical tensions might also create economic uncertainty, affecting investment decisions and market stability. Lastly, increased material costs and economic uncertainty could lead to higher inflation and interest rates, impacting mortgage availability and affordability. However, the extent of these impacts remains uncertain, as this scenario is not a win-win, nor even a win-lose, but rather a lose-lose situation for both Europe and America," explained Adam Greguš, Chief Economist and Strategy Advisor at Czech real estate company JRD, for Property Forum.
