This week let's discuss some things from overseas.
Overseas migration, like internal migration, involves a net result, being people arrive from overseas, whilst others leave Australia to live elsewhere.
Chart 1 shows that – pre Covid – some 10,000 people each week where arriving from overseas, whilst 6,000 folks were leaving Australia, again each week, resulting in a net overseas migration intake of 6,000 per week.
The number of people leaving Australia has been on the rise.
One could quip that it is mostly youngsters escaping their HECS debts.
But on a more serious note, some one million expats are living aboard.
Australia is the envy of many and our Covid results have increased our appeal.
I do wonder how many expats are now lining up to return. I also like to muse how many are truly now looking to leave.
Yes 2021 will see a lower net overseas intake, but assuming expats can get back, I do ponder how low this net result will actually be.
Plus 2022, and beyond, could see a boom in overseas arrivals.
Watch this space.
Developers who largely rely on overseas buyers are lining up now, calling for relaxations in FIRB regulations and reductions in stamp duties for foreign buyers.
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Apparently Covid has “decimated” offshore market sales.
Hmmm, well chart 2, shows that overseas buying of Australian housing assets has been on the wane for some time.
Remember it was China that closed its capital account in 2015 which stopped the flow of illegal funds into Australian real estate and ended the buying up of the Aussie middle class.
I am a strong believer that we should limit the proportion of new stock that we sell to foreign buyers.
I have said that this maximum should be fifty percent in the past.
I am starting to think that even that is too high.
We shouldn't rely of overseas buyers to make our housing developments work.
Twenty-five percent might be more appropriate and only if the developer is headquartered overseas and is bringing new capital and experience down under.
When it comes to resales, we should have a very simple rule, ‘no passport, no buy’.
We should only sell established housing to Australian passport holders.
Foreign buyers should also pay a higher stamps and land tax too.
Fighting words maybe, and if so, dukes up.