Returning Australian expats wanting to buy property face homecoming hurdles

Nervous Australian expatriates roiled by unrest in Europe are eager to come home.

But lending clampdowns by banks coupled with low stock levels are making it increasingly tough for those, not only in Europe, wanting to return and call Australia home again.

The combination of upheaval in Britain, France and Turkey, and with the clock ticking down to Christmas, residents working aboard should be knocking on the door. However, advocates and brokers representing offshore-based Australians, said tightened red tape had reduced enquiries across most of the market – and they were not expecting it to pick up.

At the luxury end, where $15 million upwards is splashed on a home, it is a different story, with real estate agents bracing for upcoming demand.

Buyers’ advocate Nicole Jacobs said Brexit spurred many expats to assess where they were keeping their wealth.

“At the upper end [of the market] expats are very conscious of making sure they have secure investments, and working out what the implications could be if something happens,” Ms Jacobs said.

Ms Jacobs expects international calls to roll in come September.

“A lot of them are already then finding out that they are coming back, so they are approaching us to secure a home before their children start the [2017] school year,” she said.

Prestige property agent Ross Savas, managing director at Kay & Burton, said his British-based Aussie clients were “antsy” about returning.

“I was in London for two weeks and saw many, mainly in banking and finance, saying ‘we don’t like this direction, time to come home’,” he said.

Mr Savas said terror attacks in neighbouring France had contributed to their sense of urgency.

“That underlying unrest, they are saying ‘how long will it take to hit London?'”

Mr Savas regularly visits Singapore, Hong Kong, New York and London to meet high-net clients who want to buy in Australia.

He said the peak period for expat activity in the Melbourne property market was approaching, and he anticipated a busy spring.

“They want to set themselves up for January, so from August onwards that is when it begins, and that is why I spend so much of my time travelling, and [the mood] is very serious,” he said.

Mr Savas said post-September 11 there was an “avalanche” of demand for Melbourne property from Australian CEOs and powerbrokers based in New York. “It was catastrophic – there was panic to come home,” he said.

Returning expats will also face financial hurdles as banks tighten the screws on local applications that rely on foreign income.

Westpac Group has given those buyers a maximum loan-to-value ratio of 70 per cent, reduced from 80 per cent.

David McMillan, director of investment firm Performance Property Advisory, said with the Australian dollar low, expat enquiry should be high.

“But the problem that expats are facing at the moment is that the banks have really tightened up their lending to expats,” Mr McMillan said.

“Banks are looking for a minimum 30-40 per cent deposit, and they are looking at [expats] income, depending on which currency it is, and they are discounting the currency aggressively.

“Your average expat who was making a couple of hundred-thousand dollars a year and perhaps had a couple of hundred thousand dollars saved to buy a home, and in theory was in a good position, can’t do it anymore.”

Mortgage adviser Clinton Waters, director of Axton Finance, said he recently assisted a client in Kuwait who wanted to “stick it out” for another year.

“The expat market has definitely been tightened up,” Mr Waters said. “It used to be that the policy was generally open if you were an Aussie working overseas. The level of enquiry for us is relatively static, but those clients who are Aussies working overseas, I get a sense of contingency planning.”