Macquarie sees Brexit assisting Australian property outlook

The United Kingdom's vote for Brexit may boost demand for Australian houses, Macquarie economic analyst James McIntyre suggests.

The vote for Brexit may prompting more expatriates to return home and deterring locals from heading abroad

Mr McIntyre's note to clients last week, obtained by Fairfax Media, also said there is now the "potential for a less negative house price outlook" for Australia.

It said 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".

"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 plunge in pound sterling, which is about 10 percent below its pre-Brexit exchange rate with the Australian dollar, also makes working in the UK less attractive to expats who envisage bringing the money home with them.

His more optimistic price growth revision followed the prediction of a 7.5 percent decline in house prices from March this year, citing weaker population growth and a "bulging" pipeline of new homes being supplied.