Aussie expats packing bags and buying property

From New Zealand to Finland, a torrent of returning expats looking for well-located property has offset the near eradication of immigration in 2020.

The influx has helped push consumer confidence in property to a seven-year high, with economists and major banks predicting a resurgence of the housing market in 2021 as many Australians return home.

According to the federal government, there are more than 29,000 Australians who have currently registered their desire to return home. 

Since mid-March, 398,000 Australians have returned and a significant but unknown number of people have also binned or delayed their plans to leave Australia for overseas jobs. 

In 2019, roughly 1 million Australians were living and working abroad. According to a survey by Advance, one in five of Australia's highly skilled expat community has come home in 2020.

Speaking to Australian Property Investor Magazine, three property and expatriate services experts identified a range of property markets that were benefiting the most and the source of the returning Australians.

Executive chairman of the SMATS Group, Steve Douglas, said all the mainland capitals were experiencing demand from expats.

“Sydney and Melbourne have always had a strong expat presence so there is an uptick there, but Perth, Brisbane and Adelaide are seeing increased return activity too as many return to their original state, while some chose these lower cost housing markets as their new home,” Mr Douglas said.

“There is an apparent focus on liveable properties in desirable areas, with a broad price range dependent on the individuals’ circumstances.”

Ray White chief performance officer Adam Downes said there’s no one area or city or price point, but lifestyle and coastal areas have seen some strong spikes this year. 

James Nihill, managing director at Patrick Leo, said the NSW north shore was popular, as were regional areas like Byron Bay and central coast and southern Queensland.

“Experts predict that millions of prospective future Aussies are waiting in the wings to relocate to home as soon as physically possible - seeking to flee countries that are experiencing escalating health or political risks, such as the US, UK, Europe, Hong Kong and China,” Mr Nihill said.

“As a result of these factors, demographic experts forecast we are due for a ‘migration tsunami’ which will lead to extremely high housing demand.”

CoreLogic data from October reveals vacancy rates have dropped in every capital city apart from Melbourne in the past month. As more expats look for somewhere to live after exiting hotel quarantine, there will likely be further pressure on the market.

World of change

As any Australian who has travelled abroad can attest, their compatriots are everywhere.

Mr Downes said expats were searching online in record numbers in 2020, from all parts of the world. 

“We have seen a huge jump in overseas people looking for property across our network of office websites, including a 20 per cent spike in overseas users searching for property in October,” Mr Downes said.

“The highest demand is from across the Tasman Sea, with a 39 per cent surge in people searching for Australian property from New Zealand compared to last October, while there was a 44 per cent rise in UK-based buyers, a 24 per cent jump from buyers in Hong Kong, an extra 35 per cent from buyers in Germany and a whopping 97 per cent surge in people in Finland looking at listings in October, compared to the year before.” 

This compared to a 43 per cent increase in Australians looking at property on the Ray White network in October.

With the impact of COVID-19 being universal, Mr Douglas said it was more about industry than location when it came to expats being driven to leave their overseas careers.

“The jobs that have been impacted by the pandemic, whatever the country of origin, are the ones that are evaporating and forcing people to reassess their careers and longer term plans,” Mr Douglas said. 

“We’ve noticed a fairly even spread all over the world in terms of returnees, but the airline, tourism, hotel and accommodation industries have been decimated and for many Australians who had been working in these sectors, they are returning to the comparative security of Australia, while for those who might have saved over many years, they are temporarily or effectively retiring.”

Better times ahead?

ANZ Bank economists recently said their initial house price forecast of a decline of 10 per cent from peak to trough had proven overly pessimistic.

They instead turned 180 degrees, and forecast price gains of around 9 per cent across Australia’s capital cities next year.

While many expats return to Australia with modest savings and uncertain employment prospects, a large proportion have enjoyed high salaries, low tax regimes and global investment opportunities for many years.

The higher than expected volume of wealthy expats returning home is having a particular impact on swelling the buyer pool for prime residential property. 

Many are considering expanding their property portfolios while the prime market records modest growth and interest rates are cheap.

Prime property equates to the most desirable, and normally most expensive, property in a defined location.  

Commonly, but not exclusively, prime property markets are areas where demand has a significant international bias. 

Sydney's prime residential property price growth is set to rise higher than the global average in 2021, Knight Frank's Prime Global Forecast 2021 report has found. 

They expect Sydney to see three per cent growth, compared to the global forecast of two per cent. Melbourne is set for a positive 2021, with a more modest one per cent growth forecast. 

Knight Frank expects prime sales in Melbourne to pick up post lockdown, however they predict that demand will remain lower in 2021 with a solid pipeline of new prime supply. 

They only forecast a marginal increase in new supply in Sydney's prime real estate in 2021.

Mr Douglas of SMATS Group said this upper end of the market could see gains beyond next year.   

“I think investors are going to be far more savvy about what they buy and are moving more into that sector where there is stronger demand and lower supply, which helps support and drive prices,” he said. 

Ray White’s Mr Downes said top-end expatriate buyers were out in force.

“In Brisbane, we just saw an expat based in the UK buy a luxury world-class home for $10 million before it was even finished, while a returning expat from New York fought off eight other bidders for a gorgeous multi-million dollar terrace in inner city Sydney,” Mr Downes said.