The UK’s vote for Brexit may boost demand for Australian houses by prompting more expatriates to return home and deterring locals from heading abroad, according to new analysis.


Macquarie economic analyst James McIntyre says faster population growth for Australia may be a beneficial side-effect of Brexit. With population expanding near its slowest pace in a decade such an acceleration, alongside further expected cuts in interest rates, could support the housing market.


Macquarie analysts grabbed headlines last year when they predicted a 7.5% decline in house prices from March this year, citing weaker population growth and a “bulging” pipeline of new homes being supplied.


McIntyre’s latest note says there is now the “potential for a less negative house price outlook”. The prospect of stronger population growth as a result of Brexit, alongside further interest rate cuts, “could boost housing demand, and confound some of the more aggressive expectations for negative housing spillovers”.


Migration is partly driven by the different economic prospects of countries and McIntyre argues there is a good chance the Brexit decision will increase the flow of net migration (the number of immigrants minus emigrants) into Australia.


“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,” he says.