Overseas searches for Australian residential property fall amid COVID-19, figures show

Overseas interest in buying Australian property has dropped in recent months as the coronavirus crisis brings global travel to a halt, new figures show.

But residents of some countries such as Hong Kong are bucking the trend and becoming more keen to search for Australian real estate amid the rising political tensions.

Searches from overseas for properties for sale on Domain.com.au fell 5.1 per cent in financial year 2020 compared with financial year 2019, Domain data shows.

From China alone, searches dropped 27 per cent over the same time frame, while Singapore fell 16 per cent and the United States fell 10.5 per cent.

Domain senior research analyst Nicola Powell attributed the slowdown to international border closures to contain the spread of the COVID-19 pandemic.

The US in particular is otherwise a strong source of demand for Australian real estate, and Dr Powell was surprised more Americans were not trying to move here given that country’s “devastating” health crisis.

“But maybe we’ve seen a slowdown because travel is so restricted,” she said.

“If you weren’t on the forefront before serious border lockdowns occurred, it’s much harder to relocate.”

Elsewhere, the UK bucked the trend with a 6.7 per cent rise in searches, which Dr Powell attributed to the large expat community seeking to come home.

“During the pandemic we’ve all realised what’s important – lots of people are wanting to live closer to their families,” she said.

Hong Kong also recorded a 14.1 per cent jump in interest, which Dr Powell linked to political unrest and expats starting to come home to Australia.

The rapid pace of upheaval this year has affected property decisions, traditionally a longer process.

Some expats who own property overseas moved back to Australia in a hurry and looked for an executive rental instead of a home to buy, Sydney Sotheby’s International Realty managing director Michael Pallier said.

Traditionally, they would have months to sell their home offshore, find one to buy locally, settle and move.

“They need to get something immediately when they come back so they’ve been leasing,” he said.

“They’re straight out of self-isolation [in two weeks] and they need somewhere to stay.”

With Australians coming back to Sydney from London, the US, Hong Kong and Singapore, he had rented homes for between $5000 and $10,000 a week.

He had one client based in San Francisco lock up and leave her home, return to Australia and take a 12-month rental here where the health situation is better and the children can attend school.

In Melbourne, locals are much more active than overseas buyers now, Belle Property Balwyn principal director and auctioneer Robert Ding said.

“In the higher end of the market, anything around that $3 million-plus, I’ve noticed the overseas market’s almost non-existent,” Mr Ding said.

“I’m talking about the new overseas market – I’m not talking about the buyers that are already here buying property and have the temporary visas or the 188 visas [for significant investors] that have now got permanent residency. They’re the ones buying at the moment.”

Expats who had already come home pre-COVID-19 were buying property but those forced to relocate in a hurry were struggling to find new jobs and were not buying, he said.

He had also noticed an increase in Hong Kong residents coming back to Australia.

“With regards to what’s going on in Hong Kong, there’s a little bit of activity from people in Hong Kong. Not a lot.”

With Australia’s borders closed to international students, overseas searches for rental properties fell 11.5 per cent compared with a year ago.

Searches from China were down 29.3 per cent, the US fell 15.3 per cent and India dropped 15.5 per cent.

The UK again showed the opposite effect with an 11.3 per cent rise.

Dr Powell was upbeat about the outlook for overseas interest in Australian property, given our better handling of the crisis than many other nations.

“Australia’s containment has been successful and the economic recovery will be quicker, so what that might mean for overseas residents is that not only will Australia’s economic appeal grow, it may be seen as an attractive place to purchase investment property,” she said.

“In the months ahead, Australia might start to see re-interest from overseas investors looking to Australian property because the outlook is better compared to other countries.”