Big rise in expats looking to buy property 'back home' post-pandemic: survey
Research conducted by Knight Frank has confirmed an increasing number of expats are set to purchase property ‘back home' as the impact of the covid-19 pandemic unfolds around the world.
Fully 64% of agents polled said the lockdown had influenced expats' decision to buy a property in their home country, which has led to a significant uptick in residential enquiries since the start of the covid-19 pandemic.
The survey, which canvassed Knight Frank's worldwide network of prime brokers, to understand more about the attitudes of expats around the world highlighted, however, that only 29% of expats are considering a permanent move. 14% are buying property purely as a second home but the majority (57%) are seeking a 50/50 home, one which will provide them with a base back home and one that they might consider returning to permanently in the long-term.
Time in lockdown has underlined the importance of family for many and focused their minds on the type of lifestyle they want to lead."
"Time in lockdown has underlined the importance of family for many and focused their minds on the type of lifestyle they want to lead," according to Victoria Garrett, Knight Frank's head of residential in Asia-Pacific.
She added, "For expats with older parents back home or children heading to boarding school abroad - and the prospect of a potential eight or 12-hour flight to reach them - the covid-19 pandemic has meant that many are rethinking their long-term plans."
The research found that being close to family members was cited by expats as the main reason for their property search, followed by a new job offer, whilst a better healthcare system back home ranked third. Their children's educational needs came in fourth place.
The trend among expats to return home is not limited to only a few countries but is evident in multiple markets worldwide. Data from Statistics New Zealand, confirms the trend was gaining traction before the pandemic but the results of the survey show the level of demand from expats globally is now accelerating.
In the year to March 2020, arrivals to New Zealand increased by 13% and departures declined 5% over the same period. New Zealand citizens were the largest group of incomers, totalling 42,800 over the 12-month period.
Kate Everett-Allen, head of international residential research at Knight Frank said: "Although currency is not considered the main motivating factor behind expats' purchase decisions, 57% of our agents confirmed it was an influencing factor, particularly among expats from Australia, New Zealand and the UK." A snapshot of some of the key trends being observed by the Knight Frank global prime team are highlighted below. Not surprisingly, demand is strongest among those expats located an 8-hour or longer flight from home. Intra-European expats movements for example are not as evident.
Interestingly, expats aren't targeting high-yielding investments with many opting not to rent their second home out. A number of French expats, for example, aren't seeking investment assets in central Paris but looking to the Alps instead.
Paddy Dring, Knight Frank's global head of prime sales said: "Expats are taking the long view, balancing current career plans with family and lifestyle needs and at the same time keeping one eye on tax and currency shifts."
Perhaps contrary to expectations, a rural retreat (14%) is not the top priority for expats. According to our global prime team - suburbia (43%) is the preferred location. With many expats city-based whilst abroad, a move to the countryside for some may be considered a step too far, most settling instead for the middle-ground, enabling them to still sample urban life, its restaurants, bars and cultural amenities from time-to-time.
In addition, most expats are seeking a resale property with 29% prioritising new-build, the majority of these being Asia-based. In terms of property type, 62% are seeking a detached home with outdoor space mirroring post-lockdown trends we are seeing across the wider market - although it is difficult to gauge whether this will be a lasting development.
Most expat budgets sit below $3m but higher budgets are evident in markets such as Australia, Switzerland and France. Families want a home where their children can stay longer or can come back to if they need to bunker down together and in some cases they are willing to stretch that bit further to have the luxury of space and, in some markets, a waterfront location.
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Originally published: https://www.internationalinvestment.net