Expat market Australia
A leading finance broker says Australia’s expat market is booming, as expats continue to snap up property undeterred by rising prices and the threat of interest rate rises. Image – Canva
  • Returning expats undeterred by price rises and looming interest rate rises, purchasing property above median values
  • CBD apartment market declining, while interest piques in regional areas, holiday locations and luxury residences
  • Interest rates expected to inflate slowly from June, though should have little impact on loan maintenance says Helen Avis

Activity within Australia’s expat market is lively, despite initial predictions that market factors would dissuade expats from purchasing.

The SMATS Group’s Director of Finance Helen Avis said expatriate Australians continue to snap up property in the face of rising prices and the looming threat of an interest rate rise.

The leading finance broker noted expats remain undeterred by these factors, purchasing property for a considerably higher price tag than median values.

CBD market declining amid regional boom

According to Ms Avis, a trend has emerged within the expat market which has seen expats transitioning from rentals into their own properties, able to afford properties within highly coveted areas.

“The $2 million to $4 million bracket has been very active as expats plan their eventual
return and want to buy the future home, or move from their temporary rentals having
recently returned,” she said.

She also noted a rise in interest within regional areas, holiday locations and luxury residences, while interest has waned in the CBD apartment market.

In the first quarter of 2022, Australian housing values have risen by only 2.4%, more than halving the pace of rapid growth seen last year.

With price growth mellowing, higher premiums from the growth of the past two years, and interest rate rises on the horizon, many investors are feeling discouraged.

Expats however, are not displaying the same level of caution, searching instead for a place to call home rather than a booming investment.

Helen Avis aussieproperty
Helen Avis, Director of Finance at the SMATS Group. Image supplied.

Interest rate rises poised for June

Though a date has not yet been confirmed by the Reserve Bank of Australia, the general consensus among the big four banks is that interest rates may begin rising as early as June.

NAB and ANZ however, chose not to hold back, having raised their fixed rates by up to 0.40 percentage points on April 1.

Ms Alvis agreed with the big four banks stating, “we have seen all banks raise fixed rates so many times in the last six months and I expect the RBA will raise rates from June.”

She expects to see a slow progression of interest rate rises, which should come as no surprise to the market which has been anticipating hikes for a sustained period.

“All borrowers are assessed at 3 per cent over the benchmark rate, so it shouldn’t put stress on people’s ability to maintain their loans.”

Helen Avis, SMATS Group

Along with rising interest rates on the horizon, the market is set to tighten as borders reopen.

“With the borders just opening back up, we should have a two-year backlog of intended migrants, expats and international students start to push up the rental market as well as CBD sales.

“The intended migrants will likely rent to start off with, but most will likely want to buy, so demand will again be strengthened,” said Ms Avis.

Ms Avis added that while viewers of SMATS Group’s aussieproperty.com site are showing interest across Australia, Queensland remains the hottest state.

Also popular among returning expatriates were markets within Sydney, Melbourne, Perth and Western Australia’s southwest region.

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