The United Kingdom’s vote for Brexit could boost the Australian property market, according to a new analysis.
Research from Macquarie economic analyst James McIntyre argued the UK’s decision to leave the European Union would drive population growth in Australia by prompting more expatriates to return home and deterring locals from heading abroad. Consequently, a drive in population growth will boost demand for houses.
“A weaker growth outlook for the UK, and Europe, could see a return of Australian expats, and a decline in the number of Australians seeking better opportunities offshore,” the note said.
The weakening pound sterling, which is about 10% below its pre-Brexit exchange rate with the Australian dollar, makes working in the UK less attractive to expats who plan to bring the money home with them.
According to McIntyre, a population drive could provide more buyers to purchase the oversupply of new apartments that are coming onto the market.
“There's still a very large supply pipeline coming into the housing market. However, a potential firmer migration backdrop and additional stimulus from the RBA are not factors which could help ease any potential indigestion,” he said.