Expats look to home with positive $A, virus response
Cashed-up Aussie expats are buying off-market as deals continue in favourable conditions, a real estate report says.
Australia’s coronavirus health record and an attractive Australian dollar are two key factors influencing cashed-up expats in deciding to flock home, according to a new report from Knight Frank.
A new report reviewing the top end of Australia’s residential real estate market found that while the withdrawal of prestige listings throughout the coronavirus crisis shrunk the pool of available listed stock, deals were still being made off-market with little discounting. Much of the demand for property came from the expat market, largely based in China, Hong Kong, Singapore, the US and the UK.
For many of those expats who are considered high net worth (with wealth valued over $US1m [$1.45m]) and ultra high net worth individuals (wealth valued over $US30m), the low Australian dollar and relative affordability of the top end of the domestic market proved attractive. But the report also noted a distinct swing towards health and lifestyle as a buying motivator.
“Globally, the currency play ranked low as the motive to buy. The Australian dollar continues to be favourable against other major currencies,” noted the report.
“Australia’s rapid response to closing its borders, social distancing measures and the portion of COVID-19 testing has been admired around the world – in addition to the country’s unrivalled lifestyle, extensive waterfront and parkland dotted throughout the cities.
“As the world comes out of lockdown, many high net worth individuals are strategically considering these attributes in the next move.”
A survey in late May by the international real estate firm showed the coronavirus lockdowns had convinced 64 per cent of global expats to buy a property in their home country. While just under a third were looking to use the home to make a permanent move, 57 per cent said the purchase might “one day” become their primary address.
Economy concerns
While the number of cashed-up people in Australia is set to moderate over the coming years because of recession and global economic downturn, individuals worth more than $US1m are expected to climb 34 per cent by 2024, totalling two million people. the number of ultra high net worth individuals living domestically is also set to grow through that time, up 29 per cent to 4881 people.
Five more people are slated to join the billionaire rankings in the next five years to account for 41.
The 4.7 per cent rise in prestige Sydney property prices through the first quarter of 2020 was the eighth-largest increase in the world. Knight Frank’s Prime Global Cities Index ranked Melbourne as the 17th largest mover (up 3 per cent), while the Gold Coast, Brisbane and Perth also ranked in the top 30.
On a global scale, prime real estate in Australia’s major capital cities is expected to record flat or moderate price falls through the rest of the calendar year alongside the likes of London, New York, Berlin and Paris.
Next year, Sydney and Melbourne prices are pegged to rise up to 5 per cent, while London and Lisbon could record some of the world’s strongest growth, it said.
Mumbai, Hong Kong, Singapore and Vancouver are forecast to fall more than 5 per cent this year, with Canada’s major city to continue the trend in 2021.
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