Almost half of Australian expatriates are using their high disposable income to purchase property at home, a HSBC survey has found.
The HSBC Expat Explorer surveyed 3,385 expats from over 100 countries, with the second of three reports, Expat Economics, examining financial factors including expat earning levels, spending, saving and investing patterns and the impact of the global financial climate.
Of the Australian expats surveyed, 46 per cent invested in property back home while overseas (compared to the global average of 30 per cent), while 32 per cent of expats living in Australia had also purchased Australian property.
“Australians’ pursuit of wealth through property has clearly not been lost on Aussies overseas, with expats living in Australia also competing for property in the local market here,” Graham Heunis, head of retail banking and wealth management for HSBC in Australia, said.
The survey also revealed that Australian expatriates overseas are earning more than their expat peers despite overall expatriate wealth remaining resilient to the current global political and economic headwinds.
The survey found that more than one third (35 per cent) of Australian expatriates overseas are earning over US$201,000 compared to just 25 per cent of expats in general. At the same, 74 per cent of Australian expats overseas report a higher disposable income now that they are overseas (compared to 70 per cent overall).
“Despite the global and social volatility going on in parts of the world at the moment, Australian expats appear to be financially resilient with higher disposable incomes compared to back in Australia,” Mr Heunis added.
The report also found the Eurozone debt crisis and unrest across the Middle East has some considering a return Down Under.
One third (33 per cent) of Australian expatriates overseas noted a deterioration in the political or wider social situation in their host country. Of this group, half (51 per cent) said they are actively looking or at least thinking about a move back to Australia (compared to 42 per cent for expats in general).
“The UK and UAE are currently home to a high number of Aussies (24 per cent and 10 per cent respectively) enjoying strong earnings. However, social, economic and security concerns in their host country may be enticing some to return to Australian shores,” Mr Heunis added.
The majority (87 per cent) of Australian expatriates claim to have complex finances, yet the survey reveals they are not actively managing their wealth.
“Half of Australian expatriates overseas surveyed make their own investment decisions without consulting an advisor,” HSBC said. “More than half of the respondents rely on family and friends for financial advice, less than half (48 per cent) have a financial advisor, 44 per cent use their bank and 39 per cent rely on the media (newspapers/TV/radio).
“Aussie expats see the value in professional advice, but still make financial decisions unilaterally,” Mr Heunis.
“With challenges like managing international finances, it is surprising expats are not seeking professional advice more often. By actively managing their wealth, expats can find opportunities in managing their money between countries and investing internationally.”
Source: spionline.com.au staff reporter 28th Feb 2012
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The housing sector is set to make a comeback, getting a further boost from yesterday’s interest rate cut, economists say.
Australian residential building approvals fell 13.6 per cent to in September, seasonally adjusted, the Australian Bureau of Statistics (ABS) said on Wednesday.
Economists’ forecasts had centred on a five per cent fall in approvals in September.
Approvals for private sector houses in September rose 1.1 per cent and the volatile “dwelling excluding houses” category fell 20.7 per cent.
Nomura chief economist Stephen Roberts said he expected the housing sector to improve in the coming months, especially after yesterday’s interest rate cut.
The Reserve Bank of Australia cut the cash rate from 4.75 per cent to 4.5 per cent and it was followed by by all four major banks cutting their standard variable interest rate.
“Already, we’ve seen housing finance commitments picking up over the last few months,” Mr Roberts said.
“This pattern with interest rates is only going to accelerate it as we go ahead.
“We’ve seem to have gone through the base as far as housing credit is concerned and that will pick up in the next few months, so some of that will come back to home building approvals.”
Mr Roberts said the rise in building approvals was particularly strong in the larger states.
“The interesting part is that is that the house part of it improved a bit and was relatively strong in both NSW and Victoria,” he said.
“The multi occupancy part is really up and down, particularly the public sector part of it.”
Despite recording relatively unexciting growth this year, Sydney property prices could rise by as much as 20 per cent within the next three years.
According to QBE LMI’s latest housing outlook, a growing deficiency in household dwelling supply will force property prices significantly higher over the coming three years.
By 2014, QBE LMI expects property prices in Sydney to be 20 per cent higher than what they are today.
But Sydney isn’t the only capital city expected to enjoy strong price growth, Perth is also expected to record 19 per cent growth.
“Price growth is forecast to be strongest over the next three years in Perth and Sydney,” QBE LMI chief executive Ian Graham said.
“The substantial level of investment in mining and resource capacity in Western Australia will drive solid income and population growth, creating robust demand for housing in Perth.
“In Sydney, the significant deficiency of residential dwellings is likely to continue to apply upward pressure on both rents and dwelling prices, attracting demand in particular from investors. Constrained affordability has resulted in little annual movement in prices in Sydney since 2004, with the exception of the 14.3 per cent increase in the median house price in 2009/10, which highlights the level of pent up demand that can be released as affordability and the economic outlook improves.”
Brisbane and Darwin are also expected to record strong growth in the three years to June 2014, with economists predicting 16 and 17 per cent growth respectively.
With property prices at the bottom of the cycle, investors are being told to buy now.
Australian Property Monitors senior economist Andrew Wilson said investors should not be put off by trouble abroad, as the Australian economy is, by and large, stable.
“Across most markets, property prices are at the bottom, making now the perfect time to buy,” he told The Adviser.
“But, investors are understandably nervous about what’s happening overseas and don’t want to invest. What investors need to understand is that interest rates are flat and they will remain flat for the rest of the year. As such, the outlook is good for the Australian economy.”
Sydney and Melbourne home buyers were not enticed to buy property over the weekend, with auction rates failing to hit 60 per cent.
In Sydney, 52.9 per cent of properties cleared – down from 63.4 per cent last weekend.
The most expensive property sold at the weekend was a three bedroom house in Bronte, which sold for $2.385 million.
The most affordable property sold at the weekend in the capital city was a three bedroom, $235,000 house in Blue Haven.
In Melbourne, the story was much the same.
Just 57.8 per cent of properties cleared over the weekend.
Real Estate Institute of Victoria chief executive Enzo Raimondo said auctions had failed to entice buyers all year, with the average rate for the year sitting at 59 per cent.
“This time last year, the average auction clearance rate was 77 per cent,” Mr Raimondo said.