Tasmania sales set to smash new records in 2022
After a record year in 2021, Tasmania appears on track to exceed the total value of properties sold across the state yet...
The property market has continued to swell as more cashed-up expats return to Australia, the Property Investment Professionals of Australia has revealed.
According to PIPA, many of the returning expats over the last 12 months have come from cities with more expensive property markets, bringing with them real estate dollars that are often in stronger currencies than the Australian dollar.
With supercharged buying power, these expats are quickly snapping up high-end properties, thus exerting a positive pressure on prices, 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,” he highlighted.
In fact, even booming markets such as Sydney are reporting sale prices way above expectations.
“[This is] leaving sellers very happy, but many buyers and property investment professionals are scratching their heads somewhat,” Mr Koulizos commented.
Smaller capital city markets like Brisbane and Adelaide, along with regional areas, have also witnessed record sale prices, driven mostly by new money or the “expat factor” from interstate locations, the chairman added.
This growing trend was also recorded by CoreLogic’s March national home value index, which found that the premium market has been leading the acceleration in the rate of capital gains.
Over March, the upper quartile of the combined capital cities recorded a 3.7 per cent rise in values, with Sydney leading the charge at a 4.8 per cent rise. In comparison, Sydney’s lower quartile saw only a 2.2 per cent rise in values.
Similarly, Melbourne’s upper quartile rise of 2.8 per cent outpaced the lower quartile at 1.6 per cent, while Brisbane’s upper quartile rose 3.1 per cent – nearly tripling the rate of increase in lower quartile values at 1.1 per cent.
Real Estate Buyers Agent Association (REBAA) president Cate Bakos highlighted the imbalance between supply and demand across Victoria, particularly in the $900,000 to $1 million price point.
But while Melbourne has ultimately been impacted by the influx of expats, local buyers are also starting to take up space in the market, largely driven by the cost of borrowed money and government incentives, she said.
“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.
“At the higher price points, and specifically in the family home markets, expats are represented by a reasonable share of buyers for certain. Buyer’s 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,” Ms Bakos concluded.
Property refers to either a tangible or intangible item that an individual or business has legal rights or ownership of, such as houses, cars, stocks or bond certificates.