Pandemic prompts expats to eye homes at home

The Covid-19 pandemic has resulted in a wave of expatriates seeking to buy properties in their home countries, according to a report in Mansion Global, a news website focusing on the worldwide estate market.

David Sapsted

3 August 2021

Australia, France, Ireland, New Zealand, the UK and US have all seen a coronavirus-inspired surge in the numbers of returning expat buyers, with the numbers expected to increase further as travel restrictions are eased.US-headquartered Mansion Global investigated the phenomenon and found that it was mainly people who had relocated far from their countries of origin who were most interested in purchasing a property back home.

Closer to family

Ray Palmer-Smith, head of Knight Frank New Homes in Ireland, revealed that more than a fifth of prime, new-home sales agreed by the firm in Dublin over the past 12 months had been sold to Irish expats looking to purchase a house back home.“Being closer to family has been the overwhelming reason many clients have given for making a purchase, but the Irish government’s response to the pandemic has also been noted as a positive factor,” Mr Palmer-Smith said.According to a report in the Economist magazine, some 15,000 US citizens were repatriated from Asia between the start of the pandemic and June last year, while Knight Frank has also recorded a surge in activity among expats looking to return home to the UK, France, Australia and New Zealand.

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Kate Everett-Allen, Knight Frank’s head of international residential research, said, “Expats located eight-plus hours from home were more likely to be considering purchasing a property back home, either as a second home, permanent move or what we term a 50/50 home (a property in a home country, which expats might return to permanently in future)."

Lockdowns influencing decision to buy a property in expats' home country

A survey conducted by Knight Frank found that 64% of expats said lockdowns had influenced their decision to buy a property in their home country. Some had already relocated while, deep into the pandemic, many were still “putting feelers out”, according to Ms Everett-Allen.“A lot of people are thinking, ‘I’m separated from my loved ones; if I leave, how easy is it to get back? If I can’t travel easily, what does the future look like for me?’,” she said.

Pandemic has made people think about what they want

Victoria Garrett, head of residential at Knight Frank Asia-Pacific, added that the primary reason cited for repatriating was to be close to family and a support network.She said the pandemic had made people think about what they wanted. “Being an expat, historically you never thought about not being able to get home and what that meant...it was always, ‘You can get on a flight'.”

Expats seeking rural homes, rather than in city centres

Hugo Thistlethwayte, Savills’s head of international residential, told Mansion Global that there were generally two types of European expatriate, one group went abroad while fairly young and, after a rapid progression in their careers, elected to return home for their children’s education; and a second group who remained abroad for the majority of their careers and returned to Europe to retire.“It’s a trend that’s happened forever — people go abroad and they come back,” he said. But the trend had escalated since the onset of the pandemic, he added.“There’s a lot of people re-evaluating what they want to do right now, and that includes expats...and maybe they’re at the more extreme end of that, because they are often a long way from home,” Mr Thistlethwayte said.In many countries, he added, expats were looking to buy rural, rather than city properties, with the UK seeing much more interest in countryside properties."Family is often a draw that will dictate where they are going to be — it’s often the reason they’re coming back,” he said. “But they’re not swapping a vast Asian city for central London. They may well come back and have a pied-a-terre in London, but they tend to be coming back to have a quieter life.”

Tax is a consideration for returning expats

Mr Thistlethwayte said some British expats returning from Asia or the Middle East were even starting with a second home in another European country, such as Portugal, Spain or other areas with golden visa-type schemes.“They don’t necessarily move back into the world of full tax on day one,” he said. “If you’ve lived abroad for a long time, not paying much tax, it’s quite a pill to swallow.”He pointed out that Portugal and other European vacation spots such as Verbier in the Swiss Alps were still “quite a bit closer than if you’re on the other side of the world”. And they offered vibrant international communities and good international schools, he said.