Buying Property in Australia — There are rules for buying property in Australia for foreign investors.
Buying Residential Properties or Vacant Land
Basically, it means if you live overseas, are not a citizen or a permanent resident, you can only purchase New or ’Off the Plan’ residential properties, or Vacant Land that is to be developed within 12 months.
However, if you do decide to settle here by immigrating to Australia and becoming a permanent resident, you can get help, support and advice from the government with the purchasing of your first home. If you wish to buy your first home, you may be eligible for government grants and/or tax relief.
Buying Investment Property
When buying an investment property, factors to consider include your present liabilities, potential rental level returns and allowable tax deductions. Home loans and Finance loans are of course available from many Australian financial institutions.
Real Estate Hot Spots
Three Australian cities are current hotspots, Sydney Australia, Melbourne and Perth, with Brisbane and the Gold Coast not far behind. See more about Where to Invest in Australia Property.
Fees and Interest apply to home loans and finance loans, they can vary considerably, especially over long term home loans, financial loans, or personal loans, so do shop around.
When buying real estate or a property in Australia, for your family home or as a financial or business investment is still one of the most important decisions anyone can make. At the end of the day, it is very much a business decision and needs to be understood from the head and not the heart.
Home and Land Prices — Goes Up in Value?
When you purchase land or a property you would want the property to go up in value. This is certainly an important consideration if you are borrowing money by getting a mortgage loan, there is interest, fees and taxes to be paid!
But property values do not always go up.
Timing is a critical factor. There are lessons to be learnt from playing games like Monopoly TM , if you borrow too much and end up with a huge bill(s) at the wrong time, you may end up paying a lot more than you bargained for by being forced to sell at the wrong time.
Australian Property Values
Australian property values and the economy go in cycles, so learn them. Try not to be too enthusiastic to buy when property values are abnormally high, typically by borrowing too much, then having to sell in a slowing housing market.
If you are cashed up, it may good to buy when interest rates are at their highest, as the rest of us who need to borrow to buy a house put off buying, while those who need to sell their investment properties quickly, decide to drop their prices.
When interest rates go up as governments get concerned about the inflationary part of the economy cycle, your ability to sell when you want at the price you thought you would get is negatively effected, even if only for a time, when there is a cooling investment market.
Australia certainly goes through these cycles, as does the rest of the world.
Mistakes to Watch For
A mistake often made in first home investments is that when people consider buying an investment property, they may look for the same sorts of things they would want in their own home. Or only consider buying in a nearby area so they can keep a close watch.
Think about the next person who would buy the property from you at a later date. Will they be impressed by what they see? First impressions count for a lot.
Things to Consider
Other things to consider may seem more mundane, but may also effect the future saleability of your house — it should be close to amenities, the street the property is on should be considered, is the street homogenous in appearance or higgly piggly with mixed types of buildings?
Even the fact that ideally a house or unit faces north or north east as opposed to a south or south east facing home, has views or if in a city, the neighbourhood has plenty of trees. Trees have been shown to keep temperatures lower on a hot summer day.
If you’re trying to keep your out of pocket costs low, it is important to negotiate effectively, particularly when you’re working with a motivated seller. Ask for them to cover more of the closing costs or include their appliances in the purchase price.
You also need to get approval from the Australian Government. Expert advice from professionals can help here and you can download application forms. There are exceptions. See more about Real Estate Australia for Foreign Investors.