While final results aren’t due for another several hours, early indications from a respected poll strongly suggest that Britain has voted to stay in the European Union.
No official exit polls were conducted for Brexit, but a YouGov poll showed Remain beating Leave 52%-48%. While the poll has a much smaller sample size than a typical exit poll, YouGov did call the Scottish Independence vote within one percentage point in 2014. And Nigel Farage, leader of the UK Independence Party and a prominent booster of the Leave campaign, has told Sky News that he thinks “Remain will edge it.”
British Prime Minister David Cameron had long lobbied for Britain to remain in the EU, saying an exit would cost British jobs and deal a blow to the nation’s economy. Those who wanted to leave the union, however, said Brexit would allow the UK to better control immigration and save the money it contributes to the EU’s budget.
“It has boiled down to jobs versus foreigners,” Justin Fisher, a politics professor at Brunel University in London, told Bloomberg.
So if early signs are correct, what does that mean for the Australian economy and property market? Mostly, it means we can breathe a sigh of relief. According to commercial real estate company Colliers International, a Brexit could have a “significant impact” on consumer sentiment, especially when it comes to property investment which is closely tied to financial economic conditions.
“Direct property investment, while somewhat sensitive to real economic conditions, is more sensitive to financial economic conditions than other sectors – especially if you consider property to be a stand-alone asset class,” Colliers said.
“Investment decisions take into consideration a wide range of financial drivers like the regulatory environment, policy transparency and fluctuations in sentiment. Following this school of thought, it's possible that a Brexit would have a significant impact on sentiment and the direct property investment market.”
However, Colliers said that consumer uncertainty from a Brexit could also play into the Australian property market, which is typically regarded globally as a safe-haven option for real estate investment.
“Our 2016 global investor survey placed London as the preferred destination for offshore property market investment followed closely by Melbourne and Sydney. If a UK vote to leave the European Union was passed on June 23rd [June 24th in Australia], this would most likely have a negative impact on business and investor confidence, and boost demand for safe havens further,” the commercial real estate company said.
“Given these outcomes, Australian real estate investment could benefit either which way the referendum results fall.”