Buyer demand and rising house prices continues to pick up pace as an underestimated rush of expats return home to the comfort of Australia’s safe shores.
Thousands of Australians living and working overseas are returning home each week in an effort to escape the economic turmoil and lifestyle uncertainty experienced by most countries around the world due to the COVID-19 pandemic.
Over 480,000 Australian expats have already returned in the last year with the vast majority returning due to the global pandemic. The Department of Foreign Affairs and Trade has reported an unprecedented spike in returning expats, revealing that an additional 27,000 are currently in the process of returning, with a further 36,000 registering interest to be next in line.
Fears around the negative impact our property market would feel as a direct result of falling population growth due the closure of our international borders, circulated quickly. According to the ABS, the 2018- 2019 financial year saw Australia’s population increase by 239,600 people due to net overseas migration. The amount of returning expats has already exceeded this, nullifying any expected impact.
Vacancy rates fall, while auction clearance rates rise
Hundreds of thousands of returning expats have played a role in defusing alarming 2020 forecasts for the Australian housing market.
Earlier this year Landlords were put on notice after analysts announced forecasts there was trouble ahead for the national rental market. Property investors were told they will most likely need to reduce rents in an effort to retain tenants, or risk being one of many investors left holding properties that would sit vacant. And yet it seems rising vacancy rates have largely been limited to the inner city apartment markets, with vacancy rates falling in most capital cities and vacancies in many regional cities dropping so low they are now verging on ‘rental crisis’ levels.
We were also warned that we would see the Australian property market ‘fall off a cliff’ at the end of September, with our big four banks forecasting devastating falls in house values up to 30%. Today these same banks have now reviewed their forecasts and are forecasting strong growth for our housing market in 2021 and beyond. This confidence is certainly being seen at auctions around the nation, where home buyers are snapping up properties under the hammer. Month on month auction clearance rates are rising across Australia.
Millions more ‘waiting in the wings’
In addition to the hundreds of thousands of expats strengthening our demand on Australian property supply levels, experts predict that millions of prospective future Aussies are ‘waiting in the wings’ to relocate here as soon as physically possible – seeking to flee countries that are currently home to escalating health or political risks such as USA, UK, Europe, Hong Kong and China.
Prior to the pandemic, Australia was already recognised as the most popular choice for the world’s wealthiest individuals looking to migrate. Today more than ever before, it is expected that Australia will be favoured above many of the previous desired locations such as the US, Europe and Indonesia, due to a changed perspective of the safety of these countries.
Remote working goes global
The emerging trend of working remotely has seen thousands of families leave our biggest cities and relocate to regional lifestyle cities.
Now we are also seeing thousands of expats returning home but retaining their employment contracts with companies in other countries. Key roles are rapidly emerging into online roles with very little need for the person filling this role to step foot in the company’s head office.
Companies have moved quickly to embrace the benefits of a remote workforce, with many of the world’s biggest industries setting a firm tone that will see remote working at a global level only become more and more accepted over the next few years. This total freedom, will allow millions of often highly paid consultants that would normally be limited to residing within the worlds biggest and most expensive cities, to live almost anywhere in the world. And yes, you guessed it, Australia is tipped to be one of the most popular countries these global remote workers target due to our health care system, AAA credit rating, and internationally envied lifestyle choices and natural beauty.
Property Analysts are now warning Australian property investors not to underestimate the wide range of post COVID-19 market conditions that will continue to drive Australian house prices higher.
Are you planning to purchase an investment property in 2021?
The property investment landscape has changed significantly, please protect yourself from making investment mistakes that can easily be avoided. For more details around these changes and how you can capitalise on the post COVID-19 property market rebound click on the link below to watch our most recent online event where we map out the easy steps you can take to build wealth safely whilst protecting your lifestyle today.