Pandemic stokes Aussie expat interest in prestige property

Australian governments’ collective response to the novel coronavirus pandemic has expats sharpening their focus on properties in their home cities, with enquiry rising quickly at the higher end of the market.

A global survey of prestige real estate agents by Knight Frank showed 64 per cent of Australian expat respondents had considered buying a property in their home country following lockdowns in countries such as China, Hong Kong, Singapore, the United States and the United Kingdom.

The research showed prime property buyers were most interested in near-city or other blue-chip suburbs, with budgets ranging between $5 million and $15 million.

However, most expats weren’t considering moving home permanently, with just 29 per cent considering a permanent move and 14 per cent buying a second house.

Around 57 per cent of respondents were seeking a 50:50 home to provide them with an Australian base, with the option to return permanently in the long-term, the survey said.

Knight Frank head of residential Shayne Harris said he had experienced a surge of enquiry for Australian expat buyers as the COVID-19 crisis unfolded, citing an example of expats accounting for 25 per cent of potential buyers for a $9 million listing in the Upper North Shore Sydney suburb of Lindfield. 

“Some expats don’t want to return to Australia immediately, but have expressed the desire to return to some normality across Australia post COVID-19,” Mr Harris said.

Mr Harris said overall, around 25 per cent of enquiries at the higher end of AUstralian property markets were coming from expats.

“These buyers make up a significant amount of demand we are seeing at the moment, particularly in Sydney, followed by Birsbane where their budget can stretch much further,” he said.

“The benefits for those buying now are the low Australian dollar and low interest rates on offer, which means they can afford to buy the most luxurious properties on offer.”

Knight Frank’s Prime Residential Review, updated following the onset of COVID-19 indicated that $US1 million bought 57sqm of luxury internal floorspace in Sydney at the end of March, ranking the harbour city 9th among the most expensive prestige property locations.

In Melbourne, $US1 million would have bought 109sqm of luxury space, followed by Perth with 133sqm, Brisbane with 139sqm and the Gold Coast 152sqm.

Prestige real estate agent Peter Robertson, a director of William Porteous Properties International in Perth, echoed the findings of the Knight Frank survey.

“There are all these people that are waiting to jump on a plane and come back to WA, and looking generally at pretty spectacular houses,” Mr Robertson told Australian Property Investor Magazine.

“What was interesting to see was the amount of enquiry on luxury properties coming in from expats sitting offshore in places like Singapore, Hong Kong, Guangzhou, Malaysia and Indonesia. 

“My furthest afield phone call from an expat was from London, then also I have people looking at luxury real estate from the east coast to the west coast, predominantly Western Australians who might have sold out of Perth in the last 10 to 15 years.”

Mr Robertson said favourable exchange rates, Perth’s sought-after climate, strong educational system and the city’s emergence as a cosmopolitan destination had been significant factors in expats’ motivations to buy.

He said he believed Perth’s value proposition, and the market’s current cycle, made the west coast capital extremely attractive for expats.

“Out of the major cities of Brisbane, Perth, Melbourne and Sydney, Perth is clear value for money,” Mr Robertson said.

“What you can buy for $5 million in Peppermint Grove (in Perth) versus what you buy for $5 million in Double Bay (in Sydney) is quite different.

“People at the wealthy end of town are sophisticated and they look at trends. 

“They look at what the prices have done in Perth over the last 10 years and they compare that to Sydney, Melbourne and Brisbane, maybe they will look at Adelaide, and it compares very favourably.

“They think we are as close as we can to pick to the bottom of the market.”

However, while Mr Robertson said enquiry had picked up, the volume of sales at the luxury end of the real estate market had not lifted commensurately.

Mr Robertson said many prestige property buyers had retreated from the market when lockdowns were enforced, with sellers similarly withdrawing homes from the market to wait out the crisis.

And until state borders are opened in WA, Mr Robertson said he did not expect to experience a big uptick in luxury sales.

“For us, we’re a little frustrated with the closed borders, because we’ve got deals to do,” he said.

“We are seeing renewed interest in the mid-tier luxury end of the market, while the really high end does rely more on the international set.

“Some of the highest value sales that I have sitting on the sidelines are because the enquiry has come from over east or overseas. 

“I’ve got some very high net worth clients who are sitting offshore, who have significant business interests but also overseas and their main business is overseas, who don’t want to go through a 14-day quarantine period. 

“Billionaires don’t want to sit on their hands for 14 days and nor do they want to buy a $20 million-plus property without coming to see it.

“The absolute upper end of our market is definitely hampered by the ability of the buyers to come in, but we’re getting enquiry on those properties, from the most expensive down.”