Returning Kiwis fill gap left by international workers
Returning Kiwis, who have carved out successful careers overseas, may well prove to be a key buyer base.3 July 2020
View from the deck at 7/8 Victoria Road North, Onetangi, Waiheke Island
Returning Kiwis, who have carved out successful careers overseas, may well prove to be a key buyer base in the New Zealand real estate industry in the coming months, according to leading economists.
Property data firm, CoreLogic says in April, net migration collapsed with just 729 migrant arrivals (582 NZ citizens) and 681 departures (634 non-citizens), compared with the normal average of 6,500 a month, who are 90% non-citizens.
That normal average inflow of overseas-born non-citizens is credited with putting upwards pressure on residential property demand and prices. But what would happen if these overseas arrivals stopped coming for a period? Would it remove a “key leg” from the property market, asks CoreLogic senior economist Kelvin Davidson.
A few groups will fill the gap of overseas arrivals who are in a position to buy, he believes. There will be those non-citizens who opt to stay in New Zealand because they like the way the pandemic is being handled, and Kiwis, previously planning to do a stint overseas, who decide to remain.
Meanwhile, historically, an inflow of 34,000 New Zealanders come back home annually. And it’s likely more will come back in 2020 as they seek the family ties and relative health security of New Zealand.
Returning Kiwis more likely to own a home
New Zealanders living overseas who are coming back, are what Mr Davidson calls “pot of gold.”
What’s particularly attractive about returning NZ citizens is that typically the homeownership rate of citizens is higher than non-citizens, notes Mr Davidson.
“If the balance of migration shifts towards citizens vs non-citizens, then there will be a tendency towards home ownership,” he adds.
It’s also possible that New Zealanders returning home will have help from family to buy homes to welcome them back.
Independent economist, Tony Alexander, is optimistic that substantially more than the usual 34,000 Kiwis will return home over the coming year.
“There’s a million Kiwis overseas, and many of them are going to look to come back,” he says.
The higher than usual unemployment rates won’t put them off, he believes. A number of them are going to buy local companies, suggests Mr Alexander, who has heard business broking firms are seeing substantial interest at the moment.
Auckland-based Kakapo business broker, James Ashwin, says he’s seeing very good movement in his market. He’s talking to two New Zealand businessmen currently in quarantine who are looking to buy businesses with him as soon as they’re allowed to leave their hotels.
“There’s strong interest in online businesses, where you can work from home, health businesses, and those in manufacturing and import/export,” he says.
Banks are cautious about lending at the moment, but Mr Ashwin says people returning from overseas seem to be quite cashed up.
New Zealanders investing in their future
Auckland, as the country’s largest and most diverse city, is the most popular place for overseas arrivals to settle. But a number of Auckland property markets are already benefiting from returning Kiwi buyer interest. Waiheke Island, for instance, has been receiving a lot of attention in the past two months from this group.
NZ Sotheby’s International Realty agent, Cathy Cameron, says she’s been part of nine transactions over the past few weeks and is urgently looking for more listings at all price points.
She’s selling to Kiwis living in San Francisco and Santa Monica and sold a home, sight unseen, to a New Zealand woman living in London.“Some are future proofing, investing in their future,” she says.
7/8 Victoria Road North, Onetangi, Waiheke Island
A current listing in Onetangi offering “resort style living” was attracting plenty of enquiries, she says.
Another Waiheke Island agent, Ray White’s Matthew Smith, says the bulk of interest he’s seeing from Kiwis overseas is coming from the UK. Another group of Kiwi buyers he’s helping are people who can’t travel to their normal tropical island destinations so are buying on Waiheke instead. And the upside is, they get to go there more, he says.
While Waiheke isn’t a tropical island, it tends to be 2 to 3 degrees warmer than Auckland, he adds.
The social media-savvy agent adds he is targeting returning Kiwis through Facebook who’ve just arrived into quarantine at Novotel hotels in Rotorua and Auckland, ensuring that Waiheke Island properties are front of mind.
Expect returning Kiwis to be a steady stream
Not all Kiwis who have decided to come home will return in the next couple of months. High end Devonport Bayleys agent, Victoria Bidwell, reported a number of her recent sales in the $3 million to $4 million range had been to expats returning home. Some of them are still overseas but most are hoping to return this year.
“They are buying houses ready to come home to,” she says.
Certain parts of Auckland will appeal more than others to those returning to New Zealand for the lifestyle, say agents.
Michael Swarbrick, from Harcourts Takapuna, says Kiwis coming back want to be close to the city for their jobs. So suburbs which are convenient to the CBD, such as Takapuna, Belmont, Bayswater and Devonport, are especially attractive, he says.
And they offer the lifestyle. “We’ve got the beaches and the schools and that’s important, it’s why this area is in high demand,” he adds.