While Australian real estate has always been a solid investment for expats, a few recent developments have made an even stronger case for domestic property purchases by this buyer.

Not only has the falling Australian dollar boosted the buying power of anyone earning a major foreign currency, several other buyer categories have recently been faced with restrictions or knocked out of the field all together, leaving the way open for expats to act.

The first major shift will be driven by the recent APRA rulings, which I talked about in depth here. In short, local investors will require bigger deposits and face paying higher fees and loan rates, meaning activity from this sector will intuitively fall. Then there’s also the effect of the correlating higher interest rates that will gradually be enforced on owner-occupier loans, which will reduce the number of buyers in this segment, too. And of course, all of this is before any official cash rate changes are made by the Reserve Bank, which ultimately are inevitable at some point.

Lastly, Joe Hockey has finally announced a crackdown on illegal foreign property investment, with new rules now meaning substantial fines for real estate agents, conveyancers and migration agents who knowingly assist illegal purchases.

Add to this mix last week’s news, where ASIC has found in a new report that around 40% of interest only loans in the past year did not include a proper assessment of the buyer’s ability to repay the loan. Apparently lenders, including the majors, have been regularly assuming loan terms that outstrip the borrowers retirement age or in some cases, even their expected lifespan! It begs the question as to what APRA may do next to address this issue?

It may also be fair to question at this point if expats are sitting in pole position in the domestic property market. A recent dealing with a young couple currently based in the USA might more easily illustrate the opportunity.

James and Kate (not their real names) moved to San Francisco back in 2012 for a contract role, without any real intention to ever return to Australia. Expecting that they would buy a home, they moved the proceeds of their house sale here to a US bank account. At the time of the transfer, the Australian dollar was almost at parity, so their AU$350,000 directly translated to around US$340,000.

They soon found out they didn’t actually enjoy living abroad as much as they thought and so never purchased property, instead making some trades on the local stock market and investing in term deposits along the way. Three years later, their US$340,000 has become US$408,000. And because the Australian dollar is at just US0.72c, that equates to AU$565,000.

Now Kate’s pregnant, the couple have decided they definitely want to raise their family back home in Sydney when the work contract is up. So after a brief search, they’ve just invested in a gorgeous four bedroom inner city home for which they’ve paid $1.5m with a 30% deposit. They’re renting it out at $4766 a month against loan repayments of $5067 – and of course with their earnings in US dollars, their ability to cover the difference and even make extra repayments is at an all-time high.

It’s hard to imagine a better time for expats to buy back home. Their buying power appears to simply be unmatchable by any other buyer segment. Additionally, recent developments on the world’s stock exchanges have only highlighted the relative stability of property – could be just the right time to jump the fence.