The great Australian dream is to own your own home. It’s been part of the Australian psyche for generations.
When you arrive in Australia and fall in love with the country (and you will) then you too will want to own a part of it. So, what does it take to buy a home in Australia?
Your deposit
As a rough guide, you will need 5% of the purchase price to pay for purchasing costs including stamp duty (tax), legal fees and incidentals. You will also need to make up the difference between the mortgage and the purchase price.
For example, if you are borrowing 80% of the purchase price then you’ll need around a 25% deposit.
Your team of professionals
When you begin to look for property you will need a conveyancer or solicitor who is based in the state that you are buying in. They will review the contract to buy the property and help with due diligence.
You’ll also need a specialist mortgage broker like the Home Loan Experts to arrange a pre-approval for a mortgage with a suitable bank. Call us on 1300 889 743 when you’re ready to start the pre-approval process.
Buying a home
Most temporary residents are allowed to buy a new or existing property in Australia to use as their home. The property must be sold if you move back overseas or can be kept if you obtain permanent residency.
Foreign citizens who are living overseas and who do not hold a temporary visa cannot buy a home to live in but they can buy an investment property.
You can find out more about how the home buying process in Australia with our non-resident buyers guide.
Buying an investment property
Temporary residents and foreign investors are eligible to buy a new property, off the plan apartment or vacant land for development but they cannot buy existing properties.
This is because the Australian government wants to direct foreign investment into increasing the housing supply and prevent house price bubbles.
Australian citizens and permanent residents do not have these restrictions even if they are living overseas.
Australian government approval
You’ll need to get approval from the Foreign Investment Review Board (FIRB) as part of your purchase. Your conveyancer or solicitor will organise this for you and it should be a simple process as long as you follow the above rules.
Risks you need to be aware of
If you are the winning bidder at an auction then you are committed to buying the property and paying a deposit. If you can’t complete the purchase then you may lose your deposit, which can be up to 10% of the purchase price.
You should arrange a pest and building inspection before you commit to buying a property. Termites are common in Australia and, in some areas, can affect up to a quarter of houses.
You can refer to your conveyancer and mortgage broker for a full list of precautions.
Choosing a property to buy
If you are overseas, you can use the services of a buyers agent to find a property for you. Better yet, your mortgage broker can refer you to one of the companies that locates FIRB acceptable new properties for foreign investors.
If you are in Australia, you should check out domain.com.au or realestate.com.au, two of Australia’s largest real estate websites.
Our non-resident mortgages page provides essential information for your particular situation, whether you’re a temporary resident, on a 457 working visa or an Australian expat.
Alternatively, please get in touch with one of our senior mortgage brokers by calling 1300 889 743 or completing our free assessment form.