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.
There are many people on a Temporary Resident Visa 457 that wish to buy a home in Australia. Many go on to apply for their permanent residency to make Australia their home.
In this short video I will show you what the requirements are for a temporary resident in relation to the Foreign Investment Review Board. How much money you need to buy your home, and how much financial institutions are willing to lend you.
I hope you enjoyed this video. Please share it with your friends and leave a comment below.
Here is the transcript:
Australian temporary work visa 457 and buying a home with a home loan:
Hello this is Andrew with Australian Expat Loans and thanks for joining me in this video on moving to Australia and buying a home with a 457 work visa. I’d like to keep this video relatively short but I’d just like to be able to point out and share with you some of the common questions that I get asked about buying a home in Australia as a temporary resident and how much it will cost and so forth.
In terms of how much you will need to buy a property, it is generally accepted that if you are buying a home in Australia that as a temporary resident on a 457 temporary resident visa, or some of the other classes that are accepted, you will require around a 20% deposit. So I just thought
I’d use an example just to make it easy; -
If you’re buying a home for $500,000 in Australia as an established home, you need about 20% deposit, which is around $100,000 and you should probably calculate another 5% so, in this example, another $25,000, to cover stamp duty, and legal’s, lender costs etc. So to make it very easy for yourself, if you’re looking at any type of property, simply add 25% of the purchase price and that’s what you’ll require. So again in this example, $500,000 purchase price, 25% is $125,000 that will be sufficient to have a deposit and also cover your closing costs. That would mean that a lender in Australia will advance you around $400,000 as a home loan.
In terms of the procedure as a non-resident / temporary resident, please be aware that there is only going to be a select number of major or leading lenders that will approve your mortgage for you. Every lender in Australia has got different criteria for resident and non-resident / foreign investor, but if you search around you will find lenders that will fund you the 80% on the same terms as a resident so you won’t be disadvantaged and you will get the same type of rate and fees etc and conditions as an Australian would living here. You just need to be able to do the research and find the one that will accept your financial situation, and also being on a 457 temporary resident work Visa. If you’re not sure, you know, try to get in touch with a mortgage broker or you’ll probably just have to be able to ring around all the different lenders to find someone that will actually lend you the money. I’ve also got here, to do your numbers in terms of funds available, purchase price, how much you can afford. Again, you need to be able to make sure and understand that every different lender has got their own policies, guidelines, criteria, so although you may speak with one lender that will not provide you with the money that you’re seeking, another lender may. So again, you need to be able to understand and know which lender will firstly provide you with the funds, but also, based on your income and expenses, will give you the amount that you’re seeking. Again, if you’re not sure, speak to a professional in the field that will guide you, there are plenty of mortgage brokers around. Like myself, there are a few in this country that specialize in temporary residents, or non-residents so seek them out and they will be able to guide you into the right direction.
The other thing that’s obviously really important to be aware of that we in Australia have a government agency, which is a Foreign Investment Review Board, also commonly referred to as FIRB. So if you are a person that is a temporary Australian here on a 457 Visa, there are a few things you should be aware of. First of all, you can buy established or new property, but it must be your principal place of residency, so it must be bought as your home. You must sell the property when you leave Australia unless of course you’re applying to be a permanent resident then you don’t need to. You cannot buy property that is established if you’re not going to live in it. It must be for your home if it’s an established property. Also be aware that if you’re applying to the Foreign Investment Review Board, it is not an application that is based on your personal circumstances, but it’s based on the property you’re buying. So, I’ve just put in here that in the Contract of Sale, you need to have included, that this contract is subject to Foreign Investment approval. If such approval is not obtained within 40 days then this contract is terminated and all monies deposit will be refunded. So the procedure here is that, if you, as a temporary resident, you can apply and get your finance approved. If you’re then looking around and you find a property that you’d like to buy, you then negotiate with the real estate agent. Once you have an offer accepted, then you need to have that clause stated within the Contract of Sale, and you then need to make an application to the Foreign Investment Review Board. Now, it’s very simple, this part first, simply go online and go to www.firb.gov.au, and you’ll see their website. You simply click on the real estate section, as such, from there you’ve got the residential real estate, it’s also got the How to Apply tab, you can get there either way. But it’s good to be able to read all these things so you get a good understanding of what’s required. If you’re buying an established home, go into Second-hand, and How to Apply, simply click here, and as I said it’s the same way of getting here. You’ll see here that you can either apply via email online, fax or you can post and, just going back to the other form. It’s a very simple form, its only 3 pages long, and I’ll just scroll down to give you some ideas; personal information, property details and declaration. You simply submit that through to the foreign investment review board, and the application’s based on the property. Once you obtain approval, that goes to the lender as well and you’ll then be able to purchase the property. So it’s not a difficult process, it’s just knowing the steps that you need to go through.
The next step? Well, you can do everything yourself, as I’ve said in this video, you can call around all the leading lenders and find out who will accept your financial situation and provide you with the loan and also the best deal and go through FIRB and go through the whole procedure. Or you can engage a mortgage professional, as I said, there are lots in Australia. There are only a few though, that actually specialize in non-residents, like our company AustralianExpatLoans.com.au. So feel free to give us a call, or contact us online, we’re here to help. If you’re seeking further information, also check out our free report on how to structure your finances correctly, especially as a non-resident person. There’s lots of great information out there on how to make some savings. Hope you enjoyed this video, thanks for watching, and I’ll see you inside our next video.
To your Australian investing success,