Expatriates consider property investments back home as coronavirus lockdown underlines importance of family

The Covid-19 pandemic is making expatriates rethink their work-life priorities, with a growing number of executives based abroad looking to buy property in their home countries to be close to family and friends during tough times, say analysts.

A survey of agents carried out by property consultancy Knight Frank found that more than half of their expat clients were seeking property that would provide them with a base back home, one they might consider returning to permanently in the long term. Expats who were farthest from home were the most keen.

Other top reasons for the shift in preferences were better job offers and better health care in their home country.

“Time in lockdown had underlined the importance of family for many and focused their minds on the type of lifestyle they want to lead,” said Victoria Garrett, Knight Frank’s head of residential in Asia-Pacific.

“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.”

This is certainly the case for Hong Kong-based British expat Michael Allen, who said he last visited his parents, both in their 60s, in Oxfordshire in December.

“This pandemic has certainly made me miss my family and certainly it’s been a long time since I last saw them,” he said. His parents were supposed to come to Hong Kong in May, but could not because of travel restrictions.

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Although he remained “quite content” with his life in the Hong Kong for now, he said he would “like to spend a big proportion” of his life with his parents while they are around. In 2018, he bought a two-bedroom flat in Oxygen Towers, Manchester, but said he would also like to buy property in Oxfordshire where he could retire one day.

While there is no hard and concrete data to show this reverse migration, some statistics and anecdotal evidence appear to support this growing trend across multiple markets.

Citing official government data, Knight Frank noted that in the year to March, some 43,000 New Zealand citizens returned home, far outnumbering those leaving the shores to work and live overseas.

Michael Pallier, managing director of Sotheby’s International Realty in Sydney, said that they were seeing an unprecedented level of interest from Australian expat families in the UK and the US.

“The rate of inquiries from expats is extraordinary, and like nothing I have seen before in my 22 years of working [in] real estate and we expect this interest to last at least a year,” he said.

Agents in Ireland and the UK are witnessing similar spike in inquiries.

“I’ve had around 30 inquiries alone from expats wanting to return to Ireland to be nearer to their families,” said Roseanne De Vere Hunt, agent at Sherry Fitzgerald Country Homes, an affiliate of Christie’s International Real Estate.

“A lot of these clients live in two-bedroom apartments in London, New York, or Singapore, many with young families, and lockdown restrictions have increased their desire to have their own gardens and to be close to elderly relatives.”

These clients, she said, told her that the lockdown gave them time to contemplate and make work-life balance a priority.

In the UK, another agent said British citizens living and working overseas were bringing forward their plan to return to the country.

“Suffice to say they’re not quite pouring back yet, but during the coronavirus pandemic the strength of the dollar in comparison to the pound has sped up the process of many of those who had set their sights on returning to the UK,” said James Mackenzie, head of country house department at Strutt & Parker’s.

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The comfort of familiar surroundings at a time of unprecedented economic uncertainty has been cited as another reason for the “backflow demand”.

“The ‘back-home’ or ‘backflow’ demand, whereby citizens who have been living abroad for some time consider buying a property back home, [is] providing added security due to the fiscal uncertainty created by the pandemic,” said Chris Dietz, executive vice-president for global operations at Leading Real Estate Companies of the World, which has brokers in more than 70 countries.

Other agents believe that it is not necessarily the pandemic that is pushing the trend.

“Anecdotally, we have observed that Singaporeans do prefer to purchase properties in their home country – particularly so, if that is their first property – as it is seen to be a relatively less risky option compared with investing in properties abroad in an unfamiliar market,” said Wong Siew Ying, head of research and content at PropNex Realty, unit of Singapore-listed PropNex.