John McGrath - COVID-19 Turbocharges Australia's International Appeal
A surge in expat enquiry throughout 2020, and likely well into 2021, appears to be offsetting the loss of demand from new migrants, especially in the prestige market.
Capital city home values regained their losses by the close of the year, according to final 2020 data from CoreLogic, which showed growth in every city except Melbourne, which was down only -1.3%.
Of course, it’s not just expats supporting prices. Stimulus programs like JobKeeper, HomeBuilder and mortgage deferral options are also keeping home values stable, with trends like working from home also playing a part by inspiring people to purchaser larger homes away from CBDs.
As 30,000-plus Australians currently wait on a list to get back into the country, it seems they’re spending a lot of time on the property portals, with agents in desirable high end city suburbs as well as popular lifestyle locations, such as Byron Bay in NSW, reporting strong expat demand.
Looking back after major global catastrophes including the Spanish Flu, WWII and the GFC, Australia was seen as a safe haven. Millions of migrants flocked to the ‘lucky country’ for our scenic, wide open spaces, energetic economic growth, stable democracy, world class education, clean air and laid-back lifestyle. The Coronavirus crisis has once again highlighted Australia’s status internationally.
As discussed in our McGrath Report 2021, the re-emergence of our safe haven standing could have an immense impact on the market, particularly prime property in the major cities. For now, it’s expats driving strong owner-occupier demand but migrants will follow after the vaccine roll out.
Some expats are taking up new opportunities to work remotely from Australia, whilst others are leaving their international jobs because they perceive greater health and safety benefits back home.
Expats are using video inspections and asking local family and friends to inspect properties to help them select a new home for when they return. Australian agents say most demand is coming from expats living in China, Hong Kong, Singapore, the U.S. and the U.K.
According to search activity data from REA Group, U.K.-based expats are favouring beach locations and suburbs with large expat communities, specifically Manly and Byron Bay in NSW; Noosa Heads in Queensland; and Fremantle and Secret Harbour in Western Australia.
Singapore-based buyers are preferring Melbourne, with their top five suburbs being Toorak, Glen Waverley, Hawthorn and South Yarra; and Mosman in Sydney.
Australia is a proud multicultural society with one of the world’s highest immigration intakes over the past decade. This has had a meaningful impact on property price growth, especially in Melbourne and Sydney where 75% of all migrants settle.
The Prime Minister, Scott Morrison has indicated he favours a return to a ‘Big Australia’ when the pandemic is over.
In FY19, China was Australia’s No. 1 source country for family migrants and No. 2 for skilled workers. REA data shows prospective buyers from China tend to search for homes in areas with large Chinese populations, particularly Glen Waverley, Box Hill, Doncaster and Mount Waverley in Melbourne; and Chatswood in Sydney.
Demand from Hong Kong is expected to be especially strong, with the Australian Government offering new extended visa options to students and skilled workers with a pathway to permanent residency.
Throughout the pandemic, we have maintained our ‘lucky country’ status and the allure of the Great Australian Dream of home ownership here has arguably never been greater.
To read more about this, download the McGrath Report 2021 here.
The views expressed in this article are an opinion only and readers should rely on their independent advice in relation to such matters.
This article originally appeared in The Real Estate Conversation (February 1, 2021)
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