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To answer the question at the top of the article, any benefit for Australian REIT stocks posed by Trump’s decision to ban work-from-home for Federal workers depends, for now, on upside contagion sentiment.
And, while this is speculative, Donald Trump’s move to ban WFH for Federal workers could prove to be a catalyst again later this year.
That depends on whether or not Opposition Leader Peter Dutton, an open Trump fan who is no doubt watching, decides to test that policy point here.
It wouldn’t be hard to consider – Dutton has basically been stealing his talking points for years.
(And maybe that’s smart of him: Australia is unique in that its Opposition party was at one point apparently running on the single issue of nuclear energy, which I sense most Australians don’t care about.)
To be sure, a glance at the XPJ ASX200 A-REIT benchmark’s performance on Tuesday shows that significant bullishness hit the charts, right up until Trump started talking about tariffs and frightening markets.
This was largely in line with the wider market.
Why could Dutton make REIT stocks go up?
An Australian political leader promising to get strict on ‘work from home’ could be a good thing for Australian Real Estate Investment Trust (REIT) stocks, given it implies an en-masse shift of workers back into office towers.
The value proposition there is fairly obvious once you’ve got all the moving parts in the right order. REIT stocks have been suffering – with exceptions – ever since COVID-19 lockdowns saw large swathes of the world’s office-based workforce disrupted and, a lot of the time, working from home.
High bond yields and inflation have been enough to assist some stocks on the Aussie market. And, late last year, Morgan Stanley said they expect ASX200 REITs to generally climb into October 2025.
Still, valuations for commercial real estate plummeted everywhere during COVID and for many to this day, they’re still recovering. So are office vacancy rates.
Why is Trump banning Federal WFH?
The move is most likely to do with the Trump 2.0 administration’s proposal to cut government spending wholemeal.
It’s not hard to find Australians who will comment on the fat rife in our public sector, the country’s biggest employer – clearly, a desire to give Ozempic to the public sector is growing in Washington.
The question now, too, is what the U.S. private sector does with this news.
While our taste of a modern plague was obviously a Black Swan, the society-level structural shift posed by the internet had meant work-from-home jobs were slowly growing – but at nowhere near the rate they did when people were ordered to stay at home.
The rest of the story is obvious: Since then, it’s been workers vs. employers as a great culture war takes place surrounding whether work from home should be kept or forgotten.
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