I need a general guide to buying property in Australia as a foreign investor

Any general questions you might have in regards to loans and finance.
Zachary
Posts: 3
Joined: Wed Apr 17, 2019 1:55 pm

I need a general guide to buying property in Australia as a foreign investor

Postby Zachary » Wed Apr 17, 2019 1:56 pm

Hi, I’m a British citizen looking to add some Australian residential real estate to my property portfolio. I’ve narrowed down some potential listing in Victoria and looking at securing finance from an Australian bank. I have a large deposit of 200k and looking for a mortgage of 400k-500k. I’m a paediatrician earning well over $180,000 per year. I need a general guide to buying property in Australia, can you help?

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Otto Dargan
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Re: I need a general guide to buying property in Australia as a foreign investor

Postby Otto Dargan » Wed Apr 17, 2019 2:54 pm

Hello Zachary. Welcome to the forums.

Investing in Australia real estate has become really popular with foreign investors looking for strong returns and stability.

Foreign citizens can qualify for an Australian mortgage to invest in Australia however, the interest rates are high, the setup fees are high and the lending criteria are strict.
  • When borrowing up to 70% of the purchase price of a new property in Australia the interest rates are around 6.5% to 8.00%.
  • When borrowing up to 55% LVR, the interest rates are below 5.00% if you have a high net worth and earn a primary currency (GBP is one of them)
  • Foreign business income is only accepted by one or two lenders.
  • Interest only loans available (max 5 years term).

Speak with one of our specialist mortgage brokers by giving us a call
on 1300 889 743 (+61 2 9194 1700 if you’re overseas) or fill in our free assessment form to find out if you qualify for an Australian mortgage at a competitive interest rate.

Cheers,
Otto Dargan
Mortgage Broker
P | 1300 889 743
Home Loan Experts

Zachary
Posts: 3
Joined: Wed Apr 17, 2019 1:55 pm

Re: I need a general guide to buying property in Australia as a foreign investor

Postby Zachary » Wed Apr 17, 2019 4:07 pm

Okay, I could increase my deposit to get a better rate, so that’s a non-issue. A barrier to entry is the FIRB approval and the high foreign stamp duty. Can you give me an estimate of government fees on a $700,000 property?

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Otto Dargan
Mortgage Specialist
Posts: 7398
Joined: Sat Sep 06, 2008 5:55 pm
Location: Sydney, Australia
Contact:

Re: I need a general guide to buying property in Australia as a foreign investor

Postby Otto Dargan » Wed Apr 17, 2019 5:51 pm

Hi Zachary,

Yes, theForeign Investment Review Board (FIRB) approval is required for foreign nationals buying real estate in Australia.
Fees can vary depending on what kind of property or land you’re purchasing but generally if the residential property value is $1 million or less, the FIRB application fees are around $5,600. Please check the official FIRB website for a more detailed breakdown of the fees.

When buying in the states of New South Wales (NSW), Queensland (QLD), Victoria (VIC) and South Australia (SA) foreigners are levied a stamp duty surcharge. All other Australian states do not have this foreign stamp duty surcharge.
An estimated stamp duty surcharge for a $700,000 property for a foreign investor will be around $86,070.00. You can use our foreign stamp duty calculator to find out stamp duty surcharge for different properties.

Cheers,
Otto Dargan
Mortgage Broker
P | 1300 889 743
Home Loan Experts

Zachary
Posts: 3
Joined: Wed Apr 17, 2019 1:55 pm

Re: I need a general guide to buying property in Australia as a foreign investor

Postby Zachary » Wed Apr 17, 2019 7:06 pm

I’ve been going through your website and it seems there are restrictions to the kind of property and location I can buy as a foreigner.
Can you give me more information on this?

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Otto Dargan
Mortgage Specialist
Posts: 7398
Joined: Sat Sep 06, 2008 5:55 pm
Location: Sydney, Australia
Contact:

Re: I need a general guide to buying property in Australia as a foreign investor

Postby Otto Dargan » Wed Apr 17, 2019 7:33 pm

Hi Zachary,

Sure. There are only a handful of lenders that offer foreigner mortgages and they prefer metro or Category A (CAT-1) properties located in:
  • Melbourne, Victoria (VIC)
  • Sydney, New South Wales (NSW)
  • Brisbane, Queensland (QLD)

You may be knocked back for a loan or find it difficult to get approved if you’re looking to purchase outside of major metro cities.

If you’re planning on purchasing an off the plan property or a new development, there is a 50% cap on foreign ownership of new developments effective from 1 July 2017.

Give us a call on 1300 889 743 (+61 2 9194 1700 if you’re overseas) or fill in our free assessment form and one of our specialist mortgage brokers will contact you to discuss your options.

Cheers,
Otto Dargan
Mortgage Broker
P | 1300 889 743
Home Loan Experts


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