Last Updated: 22nd May, 2024

Australia has become a haven for overseas investors looking for safe and solid property investments.

Overseas investors are buying property in Australia in growing numbers.

It’s easy to see why foreign buyers would want to grab a slice of Australia’s property markets. Despite recent struggles, Australian property has provided strong long-term returns for decades.

There are lenders and mortgage brokers who have helped thousands of foreign investors qualify for an investment loan in Australia. Here’s how you can qualify, too!

How To Invest In Australia As A Foreigner

Australian mortgages can be quite complicated, especially if you don’t know what the lenders require from you.

On top of this, investment loans are considered riskier than ordinary home loans, especially foreign investment in Australia. This is the reason lenders prefer applicants who are in a strong financial position.

However, in Australia, each lender has a different criteria to qualify.

The key to getting a great investment loan deal is to apply with the right lender that can meet your financial goals. It’s also better to look for a bank that encourages investors rather than one that is conservative towards investment loans.

What Are The Basic Requirements I Need To Meet?

Lenders prefer applicants who are in a strong financial position to get approval. Some basic criteria that you need to meet include:

  • At least 5% to 10% in genuine savings.
  • Sufficient equity in other properties (i.e. this isn’t your first investment property) if you’re borrowing more than 90%.
  • A good credit history.
  • An above average credit score.
  • Stable employment and strong finances.

Not sure if you can qualify for an investment loan?

Call us on 1300 889 743 or fill in our free online assessment form to speak with a broker about your situation and they can help find a suitable lender that can meet your home loan needs.

Which Lenders Can Help Foreign Buyers?

Use our assessment tool. Your answers will generate the number of lenders who can help you get approved.

Check if you qualify for a home loan as an Australian expat

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How It Works
  1. We will ask you a few questions in order to better understand your situation.
  2. The information you entered will be analysed by our smart assessment system.
  3. Find out if there are any lenders who may be able to approve your home loan.

How Much Can I Borrow?

Generally, you’ll be limited to borrow only up to 80% LVR (Loan to Value Ratio) if you’re a non-resident applying for a foreign investment in Australia.

Despite this, you can still qualify for the same rates and discounts as any Australian citizen living down under.

Find out if you qualify for a foreign investment in Australia by calling us on 1300 889 743 (+61 2 9194 1700 if you’re overseas) or by completing our free online assessment form. Our mortgage brokers are experts at handling investment loans and can help you qualify with a suitable lender.

What Types Of Properties Are Acceptable?

Be aware though that lenders don’t accept every type of property.

As a general rule, your property needs to meet certain criteria set by lenders. As such, the property should be:

  • A standard unit, house, townhouse, or land and construction.
  • Greater than 50m2 living area.
  • In a good condition.
  • Located in a high demand location, usually a major city with more than 10,000 people.

Check out the property types page for more information about how you can borrow on other types of investment properties.

Do I Need The Australian Government’s Approval?

Foreigners must get approval from the Foreign Investment Review Board (FIRB) before they can buy a property in Australia.

However, if you’re an Australian expat living overseas or a permanent resident (PR) then you won’t need FIRB approval. This is because Australia expats and PR holders are essentially Australian citizens.

If you’re a foreigner:

  • The property that you’re buying needs to be a new property or vacant land to build a new property.
  • You can’t buy an established dwelling as an investment property.
  • You can buy a new property in your name and rent it out to your child that is on a temporary visa.

You can refer to the FIRB government website for more information.

What Information Does My Accountant Require?

Generally, property investors like to provide their accountants with all of their documents and let them take care of everything. The documents that you usually need to provide are:

  • Purchasing expenses (if applicable): Costs associated with the purchase, including stamp duty, government fees, inspection fees, conveyancing fees and so on.
  • Management expenses: If you have a property manager then they will provide an annual statement at the end of the fiscal year. The statement includes total rent received as well as the total charges associated with managing the property. For instance, property manager fees, letting fees, tribunal expenses and handling fees.
  • Rates and levies: These include council rates, water rates, body corporate or strata levies and land tax.
  • Loan expenses: These include the costs associated with the home loan. They generally include interest expenses, annual package fee or monthly fees and loan set up fees.
  • Maintenance costs: These costs are associated with repairs and renovations done on your property. Keep in mind that they are treated differently by the Australian Tax Office (ATO). These usually include repairs, renovations, cost of construction, gardening, cleaning and so on.
  • Income: Generally, the annual statement from your property manager will also include your annual rental income, claims on insurance policies and water usage charged to tenants.
  • Other expenses: These include building insurance, landlords insurance, depreciation schedule, stationery, telephone and postage expenses and legal fees.

What Else Do I Need To Provide?

Aside from these documents, you’ll also need to provide certain additional information to your accountant, these include:

  • The address of the property.
  • The percentage of the property that you own.
  • The date purchased (if purchased this year).
  • The date the property started earning rental income.
  • Number of days rented this year (ask your property manager).
  • Number of days used for private purposes (e.g. holiday homes).
  • Provide a list of assets purchased and sold to assist your accountant to calculate your depreciation deductions.
  • Did you redraw any funds from your loan this year?

The above information is a general guide only. Please speak with your accountant for a more personalised list of required documents and information for your investment property.

Why Should I Invest In Australian Property?

One of the biggest benefits of property investments is that they’re highly leveraged. This means that you may be able to magnify your potential returns with minimal funds available.

Other notable benefits of investing in property include:

  • Security: Property investors have the security of fixed returns on their investments. On the other hand, although other investments such as stocks provide financial benefits for investors, they involve a higher risk.
  • Greater returns: If your rental yields are more than the mortgage repayments then the property may as well be paying itself off. This means that you may not have to worry about affording the loan. You may even be able to cover the additional costs of property ownership if you have surplus left over.
  • Growth: If you buy in a good location then the value of your property can go up substantially. By adopting a long term growth strategy, you’ll eventually be able to enjoy its benefits. Keep in mind that Australian property prices also rise at a constant rate, which is about 2% on average.
  • Tax reductions: You can often claim significant tax deductions on any expenditure on the property, including maintenance, rates and insurance.
  • Asset base: With an investment property, you can use the existing equity in it to secure other loans and buy more property. This is a good advantage to have if you’re looking for additional finance.

Foreign Investment In Australia FAQs

Get The Experts On Your Side

Foreign buyers are a key part of the Australian property market. They help stimulate demand and keep prices on the rise. However, foreign buyers can be a challenge for lenders to deal with, so we’re here to make sure you’re confident in your ability to find a home loan that will suit your needs. Our team of experts has worked for more than 10 years in the industry, helping customers with all aspects of their property search – from finding the right home, to getting approval for loans. Call us at 1300 889 743 or (+61 2 9194 1700 if you’re overseas) or complete our free online enquiry form.