Returning expats power economic recovery with property purchases

Returning expats power economic recovery with property purchases

Returning to Australia from overseas is still challenging, but we have seen huge numbers of expats make the journey.

And that has meant a big fillip for the property market.

Many of course had owned their home back here, but for others it has meant finding one. Maybe initially as a rental and then for purchase.

For most it has meant a trip to the furniture retailers. This has been a godsend to our economy.

The foreign affairs department estimates there were about one million Australians living overseas this time last year

Between the onset of the pandemic last March through to October some 398,000 Australians returned home, possibly many for good.

By last month that was up to about 480,000 Australians meaning close to half the total number of Australians previously living abroad were back home, according to estimates by Advance.org, a professional network for expats.

Buyers agents have been a huge beneficiary from the return. As the property hunt has often begun with the expats looking online while still overseas, local buyers agents have been engaged to search and negotiate for properties.

Family members back home have often traditionally been tasked with the job, but the onset of the pandemic meant many family members were constrained by lockdowns.

According to the Property Investment Professionals of Australia chairman, Peter Koulizos, many of these expats had “plenty of dollars behind them, often in stronger currencies than the Australian dollar, which supercharged their buying power even more.”

“Expats from expensive cities like London, Hong Kong and New York often don’t consider our real estate prices unaffordable and are happy to pay what is necessary to secure a prestigious property in a desirable location,” he said.

“Our members report that some of the sale prices being achieved in Sydney, for example, seem insane – even in booming market conditions – with new money or the expat factor the likely reason.

“Indeed, some properties are selling for hundreds of thousands of dollars more than what anyone – including experts – had predicted, which is leaving sellers very happy, but many buyers and property investment professionals scratching their heads somewhat.”

It has been the pricier market segments that especially see their presence with CoreLogic noting, across the combined capitals, the upper quartile of the market recorded a 3.7 per cent lift in values in March. Sydney’s upper quartile home value was 4.8 per cent higher over the month.

The latest surge in extravagant expat buyer spending will do nothing for their reputation as easy targets.

I’d suggest sooner or later it will be obvious that the buyers’ agents should have been a little more responsible in spending their clients’ money.

 

Jonathan Chancellor, realestate.com.au, 30 April 2021
https://www.realestate.com.au/news/returning-expats-power-economic-recovery-with-property-purchases/

 
Supercharged buying power of expats is driving prices

Supercharged buying power of expats is driving prices

According to the Property Investment Professionals of Australia (PIPA), the return of cashed-up expats is adding to sky-high property sales across the nation, according to the Property Investment Professionals of Australia (PIPA).

Hundreds of thousands of people have returned to Australia over the past year, with many of them coming from cities with more expensive property markets.

PIPA Chairman Peter  Koulizos said expats were returning home en-masse with plenty of real estate dollars behind them, often in stronger currencies than the Australian  dollar, which supercharges their buying power even more.

“Expats from expensive  cities like London, Hong Kong and New York often don’t consider our real estate prices unaffordable and are happy to pay what is necessary to secure a prestigious property in a desirable location,” he said. “Our members report that some of the sale prices being achieved in Sydney, for example, seem insane – even in booming market conditions – with new money or the expat factor the likely reason.

“Some properties are selling for hundreds of thousands of dollars more than what anyone – including experts – had predicted, which is leaving sellers very happy, but many buyers and property investment professionals are scratching their heads somewhat.”

Mr Koulizos said other locations, including Brisbane, Adelaide, and regional areas, were also securing record sale prices due to “new money” coming from more expensive interstate locations.

According to CoreLogic’s March National Home Value Index, it is the premium end of the market that is leading the acceleration in the rate of capital gains at present.

Across the combined capitals, the upper quartile of  the market recorded a 3.7 per cent lift in values in March, according to CoreLogic. The index found that the Sydney upper quartile home value was 4.8 per cent higher over the month compared with a 2.2 lift per cent in values seen across the lower quartile.

In Melbourne, the upper quartile increase of 2.8 per cent outpaced the lower quartile at 1.6 per cent, while Brisbane’s upper quartile index rose 3.1 per cent – nearly triple the rate of lower quartile values at 1.1 per cent, according to CoreLogic.

Real Estate Buyers Agent Association (REBAA) president Cate Bakos said expats were impacting Melbourne as well, but local buyers weren’t giving up without a fight.

“Cashed-up expats are certainly contributing to some of our silly runaway prices in Victoria, but we also have a lot of bottled-up energy from local buyers, too, particularly those who have managed to save during COVID,” Ms Bakos said.

She said the cost of borrowed money, combined with the government incentives in Victoria, had exacerbated the supply-demand imbalance, particularly in the $900,000 to $1 million price bracket.

“At the higher price points, and specifically in the family home markets, expats are represented by a reasonable share of buyers for certain,”

Ms Bakos said. “Buyers’ agents are definitely privy to this, given expats are a cohort who typically do reach out for professional assistance, but it is fair to say that many expats are struggling to keep up with and accept the sheer pace of our market growth.”

Warmambool Standard, Warmambool, 24 April 2021

 

Rise of the rentvestor as prices soar

Rise of the rentvestor as prices soar

Property buyers are eyeing up the regions after being priced out of their preferred city suburbs, according to a buyers’ agent.

“There is no question that the Sydney property market is in a rising market phase, but the speed of the uplift is already pricing out some potential buyers,” said BFP Property Buyers Founder and Principal Ben Plohl.

“Some would-be buyers are reconsidering their options and are choosing to invest their funds in more affordable locations, such as Brisbane and Adelaide, or major regional areas like Bendigo, Orange, or Albury and remain renting in their locations of choice.”

According to CoreLogic, Sydney property values have recovered to be beyond their 2017 peak price with values firming by nearly six per cent since October last year.

Mr Plohl said some potential buyers in exclusive suburbs such as Cammeray, Mosman and Willoughby were finding it difficult to secure a holding with prices skyrocketing.

“Some people rent in these locations already and have decided that it’s more affordable for them to continue doing so than stretch themselves too far financially to buy at the current time,” he said. “Wisely, they are also deciding to make their available funds still work for them by buying elsewhere.

According to the 2020 PIPA Annual Investor Sentiment Survey, about 60 per cent of investors would consider rentvesting – renting in one location and investing in another – as a property investment strategy.

The survey also found first-time buyers who choose to rentvest is increasing with 44 per cent of first-time investors continuing to rent while buying elsewhere last year.

“Rentvesting is a sound property investment strategy for buyers who want to make the most of historically low-interest rates and rising market conditions but who don’t want to sacrifice where they live to do so,” Mr Plohl said.

“With property prices rising so fast in Sydney, it can be cheaper to remain renting in most locations than buying, but that doesn’t mean buyers have to give up their property ownership dreams.

“Australia is a big country with a number of more affordable markets that are offering better bang for your buck as well as prospects for strong capital growth and rental returns over theyears ahead.”

Times Victor Harbour, Victor Harbour, 8 April 2021

Drastic move 20% of first home buyers consider amid boiling market

Drastic move 20% of first home buyers consider amid boiling market

First home buyers are considering homes across state borders as the rapidly surging Australian property market forces them to get creative, new research has found.

One in five first home buyers are now considering buying in a different state or region, or around 2,362 people a month, Finder’s First Home Buyers Report revealed.

It found New South Wales first home buyers were more open to buying interstate than buyers in Queensland and Victoria, and that many buyers are widening their searches to take advantage of the current ultra-low interest rates and to escape rocketing house prices in their home area.

The lure of a more laid back, regional lifestyle in the wake of COVID-19 also incentivised buyers to purchase outside of their native capital.

NSW buyers were the most likely to look in the ACT or Queensland, while 28 per cent of first home buyers are looking in regional areas.

Across both Queensland and Victoria, buyers considering moving are most likely to look at the ACT or NSW.

However, Finder home loans expert Sarah Megginson said buyers should always remember to do their research before buying, and avoid jumping in due to a fear of missing out.

“You’re better off spending a few more months getting your finances into shape and waiting until you can comfortably afford your mortgage repayments, regardless of what other people might be doing,” she said.

“Focus on your own timeline. Think about things you can do to cut costs and speed up your deposit savings. If you’re still keen to buy sooner rather than later, purchasing interstate could be for you.”

Expats fuelling house price engine

First home buyers are currently battling a housing market growing at its fastest monthly pace in 32 years.

Home values increased 2.8 per cent over March, while in Sydney values rose a staggering 3.7 per cent – or $51,442 for standalone dwellings.

Source: CoreLogic.
Source: CoreLogic.

According to Westpac, this rapid increase is partly down to a “tidal wave” of expatriate professionals returning to Australia during COVID-19.

Between March 2020 and January 2021, more than 446,000 expats have returned to Australia, with real estate agent Ben Collier describing overseas buyers as a “dominant force” in Sydney’s eastern suburbs market.

“Contrary to many people’s prejudices the vast majority of overseas buyers that we see aren’t foreigners driving up prices for locals. They’re simply expat Australians who are living overseas and looking to return home, or invest in property here,” Collier explained in a Westpac note.

“Thanks to border and travel restrictions as a result of COVID-19, these expat buyers are making up a larger proportion than ever before of the purchasers actively seeking to buy property in Sydney’s east.”

It’s something Property Investment Professionals of Australia (PIPA) has also observed.

Buyers returning from Australia, often from more expensive property markets, are now backed by serious cash, and the resulting value increases is inevitable, PIPA chairman Peter Koulizos said.

“Expats from expensive cities like London, Hong Kong and New York often don’t consider our real estate prices unaffordable and are happy to pay what is necessary to secure a prestigious property in a desirable location,” Koulizoz said.

“Our members report that some of the sale prices being achieved in Sydney, for example, seem insane – even in booming market conditions – with new money or the expat factor the likely reason.”

He said properties are now selling for hundreds of thousands more than expected, leaving buyers and professionals stumped.

“Cashed-up expats are certainly contributing to some of our silly runaway prices in Victoria, but we also have a lot of bottled-up energy from local buyers, too, particularly those who have managed to save during COVID,” said Cate Bakos, the president of Real Estate Buyers Agent Association (REBAA).

The impact of government incentives and low interest rates can’t be discounted, she added, noting that these have exacerbated the supply-demand imbalance.

“At the higher price points, and specifically in the family home markets, expats are represented by a reasonable share of buyers for certain,” Bakos said.

“Buyers’ agents are definitely privy to this, given expats are a cohort who typically do reach out for professional assistance, but it is fair to say that many expats are struggling to keep up with and accept the sheer pace of our market growth at present.”

Lucy Dean, Yahoo! Finance, 7 April 2021
https://au.finance.yahoo.com/news/home-buyers-interstate-move-011037271.html

 

“Expat factor” adding to sky-high property sales

“Expat factor” adding to sky-high property sales

The return of cashed-up expats is adding to sky-high property sales across the nation, according to the Property Investment Professionals of Australia (PIPA).

Hundreds of thousands of people have returned to Australia over the past year, with many of them coming from cities that have more expensive property markets.

PIPA Chairman Peter Koulizos said expats were returning home en-masse with plenty of real estate dollars behind them, often in stronger currencies than the Australian dollar, which supercharges their buying power even more.

“Expats from expensive cities like London, Hong Kong and New York often don’t consider our real estate prices unaffordable and are happy to pay what is necessary to secure a prestigious property in a desirable location,” he said.

“Our members report that some of the sale prices being achieved in Sydney, for example, seem insane – even in booming market conditions – with new money or the expat factor the likely reason.

“Indeed, some properties are selling for hundreds of thousands of dollars more than what anyone – including experts – had predicted, which is leaving sellers very happy, but many buyers and property investment professionals scratching their heads somewhat.”

Mr Koulizos said other locations, including Brisbane, Adelaide, and regional areas were also securing record sale prices due to “new money” coming from more expensive interstate locations.

In fact, according to CoreLogic’s March National Home Value Index it is the premium end of the market that is leading the acceleration in the rate of capital gains at present.

Across the combined capitals, the upper quartile of the market recorded a 3.7 per cent lift in values in March, according to CoreLogic.

The index found that the Sydney upper quartile home value was 4.8 per cent higher over the month compared with a 2.2 lift per cent in values seen across the lower quartile.

Similarly, in Melbourne, the upper quartile increase of 2.8 per cent outpaced the lower quartile at 1.6 per cent, while Brisbane’s upper quartile index rose 3.1 per cent – nearly triple the rate of lower quartile values at 1.1 per cent, according to CoreLogic.

Real Estate Buyers Agent Association (REBAA) president Cate Bakos said expats were having an impact in Melbourne as well, but local buyers weren’t giving up without a fight.

“Cashed-up expats are certainly contributing to some of our silly runaway prices in Victoria, but we also have a lot of bottled-up energy from local buyers, too, particularly those who have managed to save during COVID,” Ms Bakos said.

She said the cost of borrowed money, combined with the government incentives in Victoria, had exacerbated the supply-demand imbalance, particularly in the $900,000 to $1 million price bracket.

“At the higher price points, and specifically in the family home markets, expats are represented by a reasonable share of buyers for certain,” Ms Bakos said.

“Buyers’ agents are definitely privy to this, given expats are a cohort who typically do reach out for professional assistance, but it is fair to say that many expats are struggling to keep up with and accept the sheer pace of our market growth at present.”

ENDS

For more information, or to organise an interview with Peter Koulizos, please contact:

Bricks & Mortar Media | media@bricksandmortarmedia.com.au | 0405 801 979

About PIPA

Property Investment Professionals of Australia (PIPA) is a not-for-profit association established by industry practitioners with the objective of representing and raising the professional standards of all operators involved within property investment.

For more information visit www.pipa.asn.au