For some time now, savvy investors from overseas countries such as Singapore, China, Britain and America have been purchasing houses on Australian soil with the trend expecting to continue despite the increase in property prices in Australia and the high rate of exchange on the AU dollar. According to a recent survey carried out by the National Australia Bank, one in six homes in the country was bought by an overseas buyer at the end of last year, with the number set to get higher in the following months. If you are an overseas national who’s looking to get your hands on a property in Australia, we’ve put together a list of essential tips for making sure you get your dream home down under.
If you are visiting Australia mainly for the purpose of investing, you will need to ensure that you have an approval from the Foreign Investment Review Board (FIRB). This will allow you to buy a new property, or secure vacant land in order to build a property on. If you are looking to buy an investment property, you will not be able to buy an established home and lawyers for conveyancing Melbourne will not carry out the process unless you are buying a new property or vacant land to build on. If you are on a temporary visa, a FIRB approval will allow you to buy on established property in order to live in, however you will be required to sell it if you cease to reside there.
Before you begin the hunt for a new Australian property, it’s important that you start building a support team.
This includes but is not limited to:
- mortgage brokers
- estate agents
- conveyancing lawyers and
- an investment property consultant.
Your consultant and estate agent will be able to help you search for and find properties that match your requirement profile, whilst a mortgage broker will be able to carry out analysis and provide credit as well as pair you with a suitable lender. Your lawyer or conveyancer will take care of all the legal details and processes that are involved with buying a new property.
If you do not already have enough funds to put down money for a deposit, you will need to start saving for the deposit as soon as possible. You will need to have enough money available to pay the difference between the price of the property and your mortgage amount, which in most cases is at around 10-20% of the total property price. Australian banks and credit providers love to see a buyer who is able to save for a deposit on their own, so if this is what you plan to do the best way to do so is to open an overseas savings account in Australia, move any overseas savings into it, and make regular deposits. At least three months of regular savings deposits should be enough to earn you a good reputation as a trustworthy investor.
As well as the deposit, there will be a number of other expenses that you will be required to pay. These include stamp duties, conveyancing fees, registration costs, inspection fees and more. You will need to ensure that you have enough money to also cover these fees as well as the initial deposit and first mortgage payment. If you plan to move overseas to Australia once the purchase is complete, you may also need to consider the costs of flights and transporting your belongings. On the other hand, if you are investing in a property in order to rent it to tenants, you will need to take into consideration advertising and estate agents fees.
Avoid Applying for Credit
Although you may have a good credit rating and be able to apply and be approved for many credit cards and loans, too much of this can get you a reputation as a credit junkie amongst the banks. If you are considering taking out credit to assist with your house purchase or investment, the best thing to do is to speak with the bank directly rather than applying for multiple credit cards or loans. Often, the bank will be able to check your credit rating and advise on the best lines of credit to apply for based on that. You also have a better chance of being accepted.