Wood duck season? Expats set to fly back into Australian residential property
Standby for the expats return.
Any extended dip in the Australian dollar will undoubtedly ensure wealthy Australian expatriates look more keenly at buying back home.
There's a trickle of early movers already, but it's not yet a race or chase.
Quite simply, despite the misleading print headlines, prestige prices haven't recovered like the rest of the market, so the timing of the expats will also benefit from their previous restraint.
Likewise many will find continued cheaper offshore financing opportunities if they seek them out.
In the meantime they mull over a website for international expats which recently named the world's most expensive cities to live in, with six Australian cities (Sydney, Brisbane, Melbourne, Perth, Adelaide and Canberra) all within the top 26.
It is possible in ignorance a few might overpay for their property acquisition.
Indeed that seems to have occured only last week when a mystery buyer spent about $12 million on a Clareville beachfront property, Kahala for very close to its asking price.
I recall the same happened with the 2010 Palm Beach purchase by the hedge fund manager Paul Henry and his wife, Belinda who paid $14 million for the Hayson family's lavish modern residence on a 1,575 square metre block in Pacific Road.
Expat Paul Henry was from the Jersey-based, but Asia-focused, hedge fund Bennelong Asset Management. Before launching Bennelong in 2004, Henry worked at Standard Bank London Limited, spent seven years at Macquarie Bank Limited and also traded at Peregrine Investments HK, Horizon Asset Limited and at Credit Suisse after graduating from the University of Sydney.
The Melbourne buyers' agent Damien Taylor of the Morrell & Koren agency recently suggested prestige buyers were doing their homework.
"While the plums are quickly picked, bruised fruit is usually left to fall — and while at first sight there appears to be much to choose from, the plums are still scarce," he advised.
James Buyer Advocates have reported there certainly seems to be more buyer interest coming from off-shore, "and in Boroondara that mainly means overseas buyers from China or ex-pats returning home from Hong Kong or Singapore or even further afield, with a view to return home for the kids to go to school."
Ken Jacobs, of Christies, said he wouldn't be surprised if the Elaine, Double Bay buyer were an expat.
CommSec economist Savanth Sebastian told AAP last month that the increased presence of expats and foreign investors would "most likely" push property prices higher.
"Australia's starting to look a lot more attractive from a foreign investment perspective with the falling currency and that will probably show up more in the property market than anywhere else," Savanth Sebastian said.
Richardson & Wrench Mosman agent Robert Simeon noted that the world’s biggest money manager BlackRock sees Australia’s dollar falling 10% as a result of disappointing economic growth reporting in 2014 which would then see the RBA cut its cash rate to 2.00%.
"There would be a number of expats hoping this to be the case as they have been sitting waiting for the Australian dollar to start declining," Robert Simeon wrote last week on his blog.
While there were some prestige Mosman sales purchases to Chinese buyers, Raine & Horne Mosman agent, Brendan Warner has detected an increase in interest above the $10 million coming from expats along with visitors from England.
Meanwhile signs of expats emerging among a few recent sales showed up when a Paddington four-bedroom terrace sold for $3 million last month to a London-based expat through McGrath agent Ben Collier. "We are certainly seeing more inquiry with the .uk address," he told Property Observer.
In Whale Beach, a five-bedroom Beauty Drive house fetched $1.9 million when reputedly sold sight-unseen to a Singapore-based expat through Peter Robinson, of LJ Hooker Palm Beach. Weekenders at Killcare have also been attracting interest from Singapore-based expats.
And the purchases aren't all at the pricey end of the market.
Lee Paul, the principal of Raine & Horne New Farm, Brisbane has sold a former-Brisbane expat executive a cute, renovated cottage at 77a Clay Street, New Farm, for $780,000.
“The cottage, which is built on a 200 sqm block and comes with a pool, was on the market for $760,000, and received 80 enquiries, as well as multiple offers,” says Ms Paul.
“It sold in 10 days to a London-based, Brisbane-born executive, who plans to live in the property on her return to Australia.”
A New York-based expatriate spent $1,305,000 in Bondi Junction, pre-auction above the $1.2 million initial price guidance through Jason Pantzer of the Phillips, Pantzer Donnelley agency.
In late 2012, Property Observer published a much-downloaded eBook written specifically for Australian citizens who were residents of another country by the veteran personal finance and property journalist Michael Laurence.
When seeking out buying tips and warnings the buyers’ agents David Morrell warned that some vendors regard Australian expatriate buyers as "wood ducks", or easy targets.
Morrell says some unfortunate expat buyers unwittingly send a clear message to vendors that they have plenty of money, are poorly informed about the local property market and have little time to inspect properties.
His advice is straightforward: "Slow down, take a Panadol, and do your due diligence on the market".
Shayne Harris, head of residential for international agency Savills Australia, says he tries not to disclose to vendors that a would-be buyer is an expatriate.
Harris says vendors may jump to the conclusion that the expatriates have plenty of money.
"It makes a very difficult negotiation, because some people think they can afford to pay anything.
"We often say to vendors, ‘The reason they have money is because they don’t pay silly money for things’."
PS: For those expats who have been out of the country too long, a "wood duck" is an Australian term for an easy mark, and in some cases useless bastard. The term emerged in the 1970s and was used by car salesmen to denote an easy mark.
