Australian expats are increasingly looking to purchase property ‘back home’ as the impact of Covid-19 unfolds, and many of those are looking to buy at the higher end of the residential market, according to a Knight Frank survey.
The survey, carried out amongst Knight Frank’s global network of prime agents, found 64 per cent said the lockdown had influenced expats’ decision to buy a property in their home country, which has led to a significant uptick in residential inquiries since the start of the Covid-19 pandemic.
However, only 29 per cent are considering a permanent move and 14 per cent are buying a property purely as a second home, while the majority (57 per cent) are seeking a 50/50 home that will provide them with a home base while giving them the option to return to permanently in the long-term.
“The survey found the main reason expats wanted to buy a property back home was to be close to family members, followed by a new job offer, a better healthcare system back home and children’s educational needs,” Knight Frank’s Head of Residential Research, Michelle Ciesielski, said.
“Currency was ranked last as a reason to move home, but 57 per cent of Knight Frank’s agents noted that expats had cited it as an influencing factor, and for expats taking a salary in US dollars and purchasing in Australia, New Zealand or the UK, there was a significant currency play compared with just two years ago.
“Expats looking to buy a residential property back in Australia were mostly based in China, Hong Kong, Singapore, the US and the UK,” Ms Ciesielski said.
“The Australian dollar continues to be favourable against other major currencies. At the end of March 2020, discounts when buying prime residential property ranged from 5 per cent for the Pound Sterling, 6 per cent for the Renminbi, Malaysian ringgit and Singapore dollars, to discounts of 11 per cent for US dollars, 12 per cent for Hong Kong dollars and 13 per cent for New Taiwanese dollars.”
The Knight Frank Research found most expat budgets sit below US$3 million (circa A$4.3 million), but higher budgets were evident in Australia, as well as Switzerland and France.
Knight Frank’s Head of Residential in Australia, Shayne Harris said Australian prestige buyers returning home were looking to buy in the city and other blue-chip inner ring suburbs, with consistent budgets of between A$5 million and A$15 million.
“Globally 62 per cent of buyers were looking for a detached home with outdoor space, to see them through lockdown and beyond, but a quarter cited they required an apartment close to the CBD in order to cut back their commute,” he said.
“Families want a home where their children can stay longer or can come back to if they need to bunker down together and in some cases they are willing to stretch that bit further to have the luxury of space and a waterfront location.
“We’ve seen an increase in the number of inquiries from Australian expat buyers in recent months; for one current A$9 million listing at Lindfield around 25 per cent of potential buyers have been expats based in Singapore or Hong Kong.”
Mr Harris said expats were looking to buy a residence in Australia as things start to return to some normality across Australia post Covid-19.
“Some expats don’t want to return to Australia immediately, but have expressed the desire to buy a residence in their home country so they have the option of returning in the future.”
Mr Harris said expats were having a significant impact on the Australian property market, particularly in the higher end, making up around 25 per cent of inquiry overall.
“These buyers make up a significant amount of demand we are seeing at the moment, particularly in Sydney, followed by Brisbane where their budget can stretch much further,” Mr Harris 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.”
According to Knight Frank Research, in Sydney, US$1 million bought you 57 square metres of luxury internal floor space at the end of the first quarter of 2020. Close to double this space could be purchased in Melbourne with 109 square metres, while in Brisbane this extends to 133 square metres.