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How To Buy Property In Australia

Buy property in Australia from overseas

When it comes to investments, there are a lot of options – businesses, the stock market and properties. However, if you want a low risk profitable investment, choices are limited.

Investing in Australian properties has become popular with overseas investors looking for returns and stability not available in their own country.

Stability

Australia’s property market has a proven record of stable prices. What’s the big difference between Australia and other property markets?

  • Approximately 70% of Australian households are home owners. There is relatively little speculation.
  • There’s been a consistent under-supply of housing in most capital cities.
  • Australia has responsible lending legislation and prudent economic management which reduces the risk of asset price bubbles.
  • Australia has never had prices fall more than 20% in one year.

Overseas property markets such as Hong Kong or the USA have suffered significant crashes that are completely unheard of in Australia. Housing prices in volatile economies can drop up to 70% within a few weeks, leaving investors with huge losses.

This is often because of significant speculation from foreign investors or asset price bubbles fueled by debt. Investors have a smaller impact in Australia as the majority of the housing market is owner occupied.

Since 1900 when records began, the Australian market hasn’t suffered a fall in median house prices over 20% in one year. This is true even the Global Financial Crisis of 2007 to 2009 which saw property prices in the UK and USA fall significantly. Australian houses actually increased in value during this period.

The Australian Prudential Regulation Authority (APRA) manages the lending activities of the banks, which reduces the risk of unsound lending practices causing an unsustainable rise in prices.

Consistent growth performance

Australian properties have enjoyed consistent capital growth over the last 100 years, with property prices doubling roughly every 7 to 10 years.

One of the reasons behind the growth is Australia’s chronic housing shortage in many of the major cities. The population is growing at a rate much faster than dwellings are being constructed.

The main cap on housing prices is in fact affordability. Effectively, prices have risen in line with the market’s ability to pay for housing.

It's easy to invest in Australia

Many countries have very restrictive foreign investment laws or banking regulations that make it difficult to invest.

This isn’t the case in Australia:

  • You don’t need to setup a company in Australia or buy with a citizen.
  • Government approval for foreign investors is simple and inexpensive.
  • Specialist mortgage brokers can assist you to obtain finance.
  • There’s strong and effective consumer protection legislation in Australia.
  • Australia’s legal system is based on the UK system so it’s familiar to many investors.
  • There’s minimal political, social or other types of instability in Australia.

Buying a property in Australia from countries like China, the UK or USA can be difficult if you don’t have the right information or enlist the services of the right people.

You can complete our free assessment form on our website or call us on 1300 889 743 and one of our mortgage brokers will contact you to provide advice on financing your Australian property investment.

Australia is a great place to live

Australia is well known for its diverse international cities and breathtaking natural beauty.

Queensland (QLD) is famous for its wonderful beaches and reefs, Victoria (VIC) for its stunning coast line stretching to South Australia (SA), The Northern Territory (NT) for its distinctive outback experience and New South Wales (NSW) for the tranquil Blue Mountains, beautiful coast and Sydney.

Over the next 50 years it’s expected that the trend of migration to Australia will continue and property prices will rise as a result.

Investors can buy residential or commercial properties

Stability and growth aren’t just features of residential houses, townhouses and units. Most commercial properties such as offices, factories and retail outlets have proven themselves to have excellent returns. Larger foreign investors tend to prefer commercial property, resorts, hotels or developments.

It’s also possible to get foreigner commercial loans from some Australian lenders.

Do you need help with finance?

Thinking of investing in Australia?

Call us on 1300 889 743 (+61 2 9194 1700 from outside of Australia) to speak to our specialist mortgage brokers who can guide you through the application process. Call us today or fill in our free assessment form.

Before you begin - budgeting & planning

It’s essential that you research, plan and budget your property purchase in Australia.

You may have a location in mind, but it’s always helpful to speak to a real estate agent who can offer you some local advice that will help you select an affordable area with great returns.

Making sure that you can afford the property is also important. Australian banks won’t lend to you if you can’t prove that you can afford the debt, so you need to have a realistic and affordable budget in place.

Step 1 - Organise your team of professionals

Conveyancer

You’ll need a conveyancer or a solicitor to take care of the legal work for you. Their job is to complete searches on the property, manage the transfer of ownership and review the contract before you sign it.

Keep in mind that your appointed conveyancer must be in the same state as the property you’re buying or at least be licensed to deal with that state. For Western Australia (WA), they are called settlement agents.

Please view our list of recommended conveyancers if you don’t have one already. It is common for a real estate agent to recommend a conveyancer to you however we suggest that you choose one that is likely to be impartial.

Mortgage broker

A good Australian mortgage broker, with experience in helping non-residents to apply for a loan, is an essential member of your team of experts.

The mortgage broker can be anywhere in Australia. They don’t need to see the property you are buying. For most residential mortgages and loans, their services are free.

If you want to buy a property in Australia then speak to an expert Australian mortgage broker. We’re specialists in non resident mortgages, hold an Australian Credit Licence (ACL) and are also a member of both the Mortgage and Finance Association of Australia (MFAA) and the Credit Ombudsman Service Limited (COSL).

We can finance properties Australia-wide and we regularly work with international borrowers. We have a panel of over 40 lenders to choose from which ensures that you’re getting the best mortgage available.

If you need finance to purchase property in Australia then please call us on 1300 889 743 (+61 2 9194 1700 from outside Australia) or complete our free assessment form to discuss your options.

Accountant (if required)

You don’t need to appoint an accountant, but there are a few benefits in having one. Your accountant can help you structure your financials and save you money on tax.

If you’d like to set up Australian companies or trusts to hold your investment, then you’ll need an accountant. Your appointed accountant can be located anywhere in Australia.

Buyer’s agent (if required)

A buyers agent is also very useful if you’re located overseas and can’t physically inspect the real estate you’re buying.

The main job of a buyer’s agent is to source and negotiate the ideal property for you. They’ll deal with the real estate agents for you and will ensure that the property you’re buying represents a good opportunity.

Your buyer’s agent must be licensed and have some presence in the state that you’re buying a property in.

Keep in mind that a buyer’s agent should give independent and objective advice, so should not be selling his/her own properties. Some buyer’s agents will charge a fixed fee, while some other will charge an upfront fee as well as a percentage of the purchase price of the property.

A true buyers agent will not earn any commission from the seller. If they are accepting commission from the seller than they are working for the seller not for you! We can put you in touch with some reputable buyers agents if you need assistance.

Step 2 - Applying for a mortgage

In order to obtain finance it’s essential that you obtain a pre-approval before you begin looking for properties. However, the lending criteria for non-residents can be very complex!

  • We have published a handy guide which shows the best available Australian interest rates for foreign investors.
  • Ensure that you prepare all necessary loan documents, such as payslips, tax returns or an employment letter to prove your income.

You can find specific lending guidelines for your situation here:

To ensure that you get approval, speak to us on 1300 889 743 (+61 2 9194 1700 from outside of Australia) or complete our free assessment form and our staff will get back to you.

Our mortgage brokers can offer free assistance and will help you with your loan application.

Step 3 - Get your loan pre-approved

It’s essential for you to get your mortgage pre-approved before you begin looking for a property. Good properties don’t stay on the market long.

The buyer with a pre-approved loan usually snaps up the best investments while the others are putting their loan applications together. More importantly, you know that you’re eligible for a loan and how much you can borrow.

Why waste your time looking for a house or unit only to find out that you can’t get a loan?

Step 4 - Confirm you qualify with the FIRB

If you’re a non-resident or a temporary visa holder, you’re legally required to get permission from the Foreign Investment Review Board (FIRB) if you want to buy property in Australia.

Australian Citizens, Australian permanent residency holders and New Zealand (NZ) citizens are exempt from obtaining FIRB approval.

Getting FIRB approval is a simple process and usually takes up to two weeks from the date the application is lodged.

You won’t actually apply for FIRB approval until you have found a property. However you do need to investigate their requirements so that you don’t buy an ineligible property for foreign investors.

Step 5 - Find a property to buy

Now is the time to visit Australia and begin your search for a property. The other option is to use a buyer’s agent (see above).

If you decided not to use a buyer’s agent, then it may be a good idea to use comparable sales to value the property. Make sure that you compare your properties to other properties that have sold outside of the development as this will mean you get a more accurate value.

Often the bank chosen by your mortgage broker will value the property, however the banks often don’t tell you if the valuation comes in short! Our mortgage brokers will always inform you if they become aware that you have overpaid for a property.

Step 6 - Negotiate the purchase price

As a general rule, Australian properties usually sell for up to 10% less than their list price. This varies depending on the market, location and type of property. Property in popular suburbs sometimes sell for more than the price that they’re advertised at!

Some real estate websites will publish the “discounting percentage” for particular suburbs, which is the average percentage below the listing price that a property sells for.

If you’re using a buyer’s agent, then they’ll help you to negotiate the price.

You can ask for a contract before signing, and get your solicitor or conveyancer to look at the contract and add any additional conditions if necessary. A common condition is that the sale is “subject to FIRB approval” which allows you to cancel the contract in the unlikely event that you don’t get approval from the Australian government.

Each state of Australia has their own property laws, use your conveyancer or solicitor’s expertise to help guide you. If the vendor allows a cooling off period you can put a holding deposit and sign the contract.

Refer to your conveyancer or solicitor, they’ll let you know what checks you have to do before buying and will let you know when it’s safe to sign the contract to buy the property.

If you’re unable to get a loan during the cooling off period, your maximum penalty is the holding deposit, usually up to $1000, and again please check with your conveyancer or solicitor as this can vary across the different states.

If you plan to sign the contract prior to the cooling off period, ensure that the contract of sale includes the clause “subject to FIRB approval”, otherwise you’ll be breaching the law.

Step 7 - Obtain formal mortgage approval

When you’ve found a property to buy, you can then forward the contract of sale to us as your mortgage broker to proceed with the formal approval.

Remember, don’t commit yourself to buy a property until your mortgage is formally approved. If there’s a cooling off period it’s okay to sign the contract, otherwise don’t sign the contract until you know that you can get a loan.

Once you forward the contract of sale us we’ll usually obtain the formal approval within a week.

Step 8 - Exchange contracts & pay your deposit

You can exchange your contract after your loan has been formally approved and your solicitor or conveyancer gives you the go ahead. Normally, you’ll need to put down a 10% deposit.

The amount of the deposit is negotiable and differs between the states. Note that once you’ve committed to a property you can’t back out, so please seek legal advice before signing any contracts or paying your deposit.

Step 9 - Seek FIRB approval

It’s very important that the contract you’re signing has the clause “subject to FIRB approval” and 30 days must be allowed for a FIRB decision. At this point, it’s vital to check with your conveyancer or solicitor that the clause is stated in such a way so as to ensure that if your FIRB proposal is rejected, you won’t lose your deposit.

A FIRB Application is simple to do and will usually be taken care of by your conveyancer. You may need to provide a copy of the approval to your lender prior to your loan being advanced.

Step 10 - Final arrangements

Once you have exchanged the contract, forward a copy of the signed contract to the FIRB for approval.

Your bank would have sent out the loan contract to you after formal approval.

You can ask your mortgage broker to go over it with you, or get help from your conveyancer or solicitor. You have the right to obtain independent legal advice about your loan contract.

To accept the loan offer, sign the appropriate sections and return the loan documents back to the bank.

Do a final inspection on your property the day of settlement. This can be completed by your buyers agent if you’ve hired one.

Step 11 - Settlement

Settlement is the term given to when the property actually changes hands and your loan is advanced.

This will be handled by your conveyancer or solicitor in conjunction with your bank and mortgage broker, you don’t need to be there for this to happen.

The title for the property is held by your lender for safe keeping and the keys are available for pick up from the selling real estate agent.

What are the costs of buying a property?

As a general rule, you should allow roughly 5% of the purchase price for various expenses associated with purchasing a property.

Expenses:

  • Legal fees – Often $800 to $2,000.
  • Loan establishment fees – Usually $0 to $895 depending on the lender.
  • Stamp duty (state government taxes, often this is the largest expense) – Please refer to our Stamp Duty calculator.
  • Additional stamp duty – Some states such as QLD, NSW and VIC charge additional stamp duty for foreign investors. This is not taken into account by our calculator.
  • FIRB approval fees – Varies depending on the value of your property and if you are a temporary resident or foreign citizen investor with no visa to Australia.
  • Property inspection fees – normally up to $800 in total for a building, pest and strata inspection.
  • Buyers agents fee – Varies depending on the nature of the services provided.
  • Other minor costs – Building insurance, council rates, water rates, adjustments, etc.

Refer to your conveyancer or solicitor for an exact breakdown of the costs associated with your real estate purchase.

How do I manage the property?

If you’re buying the property as an investment and are intending to rent out your property, you have two options. You can either manage the property yourself, or you can use a property manager.

Professional managing agents will look after every aspect of your tenancy. Their job includes collecting the rent, maintaining financial records, conducting regular property inspections, handling any disputes and arranging all repairs that need to be done.

Most property managers charge a percentage of the weekly rent as management fee. Usually around 5-10%, however this is negotiable.

You should also expect to pay additional one off fees when they find a new tenant.

Last but not least, please make sure that the managing agent you are interested in using is licensed by the Office of Fair Trading (or state equivalent) before you enter into any formal agreement.

Their licence will be displayed in their office or on their website.

Do I need to lodge a tax return in Australia?

Yes, you’ll need to lodge a tax return each year in Australia.

This isn’t too difficult to do. Your property manager should keep all of the records for how much rent you received and which expenses you incurred. You can have them transfer these details to your Australian accountant who will then prepare your tax return.

Do you need help with a non-resident loan?

Our mortgage brokers specialise in lending to Australian expats, Foreign investors, permanent residents of Australia, foreign citizens living in Australia (temporary residents) and prospective spouses or defacto partners of Australian citizens.

Please fill in our free assessment form or call us on 1300 889 743 or +61 8068 2257 if you’re outside Australia.

Still have questions? Feel free to comment below and we’ll get back to you as soon as possible.

  • Raf Orellana

    Hi there.
    I have 2 questions:
    1) What exactly does the FIRB look at when assessing the application?
    2) You mention that “Australia has never had prices fall more than 20% in one year”. Can you tell me when was the last largest drop in prices and by how much?

  • Hi Rafa,

    1. The government monitors foreign investment to ensure that the investment will benefit Australia. In particular, foreign investors are limited to investing in “new” properties so that their investment adds to the existing housing stock in Australia. This is to prevent speculation which has little benefit for the Australian economy and that could result in escalating housing prices. You can refer to the government department website for full detail.

    2. According to the Australian Bureau of Statistics, the recent one was in 2011 (weighted average of prices for established houses in eight major cities) and it was 4.8 per cent from a year earlier. You can refer to their website for full detail.

  • B Lee

    I am from Macau and am self-employed man. I have minority share in one of the popular casinos here. I want to invest in Australia, how much will I be able to borrow from the banks?

  • Hi B Lee,

    Due to the recent restrictions on lending to foreign investors, you can borrow anywhere between 40-70% of the property value. I would recommend you to discuss your situation with one of our mortgage broker to get a better idea.

  • Anna Wu

    My brother just got his 4 years temporary visa, he is still in China, he and his family will arrive in Australia in September; prefer to move to the house they have purchased straightaway. Our question is:
    Can my brother or me (act on his behalf) apply for “An exemption certificate for established dwellings – an auction certificate” now, even he is still in China?

    Thanks

  • Hi Anna,

    You’d have to call the FIRB on 1800 050 377 or +61 2 6216 1111 from overseas to find the answer to this one. I’m not sure and I wouldn’t want to give you the wrong information.

    Please be aware that as a temporary resident he may pay additional stamp duty if he is buying in VIC, QLD or NSW. At this time other states do not have this additional duty. Some possible ways around this are: buy in your name instead, buy an investment property in another state (must be a new property), rent for now and buy when he has PR. Many people just choose to pay the additional stamp duty anyway.

    The visa he is on will determine if he can get approved or not for a mortgage. Typically if he is on a 4 year visa and has a job in Australia we should be able to get him an Australian mortgage.

  • Anna Wu

    Thanks for the prompt and detailed reply.

  • Micky Magaz

    If I own a property with my dad and mom in NZ , can me and my wife go for a house together in Sydney in near future? We both moving to Sydney soon and working there permanently..
    Thanks
    I am NZ citizen and she will have partnership work visa (5 years valid)

  • Hi Micky
    Yes you can buy in Australia and your visa statuses are acceptable for a loan with some lenders.
    We’d need to assess any repayments you make towards the property in NZ to ensure you can afford it. Aside from that it should be no problem.

  • Valerie Cottle

    We wished to purchase a 2nd investment property in the Gold Coast Australia, however Commonwealth Bank informed us that due to policy change since our original purchase 8 yrs ago they do not lend to overseas investors? What banks do?

  • Hi Valerie,
    We have some lenders that can assist. CBA doesn’t lend to foreign investors, most of the major banks are out of that market now. We’d need to know more information to be sure of where you stand:
    – Citizenship e.g. HK Citizen
    – Where you are living e.g. Living in HK
    – If you have a visa for Australia then what visa number e.g. subclass 810
    – Type of income e.g. Employed / Self employed / Investor / Cannot be evidenced
    – Currency of your income e.g. HKD
    Thanks

  • Valerie Cottle

    Thanks for that
    We are New Zealand citizens and currently live in NZ
    NZ and Australia have a special relationship I believe?
    Senior Management role (Salary) for past 19 years
    Paid in NZ $s

  • Hi Valerie,

    Yes we can help with this. Please complete this form https://www.homeloanexperts.com.au/free-quote/ and one of our mortgage brokers will contact you to discuss your options. I expect we can get you a much better interest rate as well.

  • Bryan

    Can solicitor look after me at everything? like FIRB…
    So how do i send money from oversea (I am international student)
    Answer in the most simple way as much as you can please, I am not very familiar with all the terms, i am very appreciate that
    Thanks

  • Hi Bryan,
    Yes your solicitor can help you to apply for FIRB. They will also handle the legal documents to help you to buy a property. They don’t help with the loan or negotiating the price of the property.
    I’m not sure how you can transfer money from overseas as this is not our area of expertise. It would also depend on the country you are from.
    As a student you may find it difficult to get a loan in Australia. You are allowed to work 20 hours per week and usually this is not enough of an income to help.

  • David

    We are international teachers doing research into the possibility of purchasing a house in Australia. I’m a Kiwi and my wife is from the U.K. We are currently working in Thailand. We own a property in NZ that we have a mortgage on and are thinking if in the next few years we might sell up and buy in OZ. We would want to work in Australia maybe in 5 years time. Sound possible? Would you advise looking at a house with the FIRB or an apartment within a Tourist resort which we believe doesn’t need the FIRB?

  • Hi David,

    Yes this is possible. However it would depend on many things. Many of our other clients who are teachers in international schools are paid in USD or a currency other than that of the country that they live in. If you’re in this situation then this is good as Thai Baht (THB) is one currency that only a few banks in Australia accept.

    As an NZ citizen overseas we have several banks that can assist. It may be easier to just buy in your name only or it may be ok to buy in joint names. We’d need your full details to be sure. UK citizens are seen as foreign investors by most banks and aren’t treated as favourably as NZ citizens.

    You’d be able to borrow 70% – 80% of the property value. Potentially more on a case by case basis. NZ Citizens living in NZ or Australia are seen more favourably so if need be you can wait until you move to Aus to buy.

    Buying in a resort isn’t a good idea as banks don’t like resort properties and the combination with living overseas will mean your loan will be declined. Buying a new property is fine, just be careful as some are being sold over the market valuation. We wrote an article about where to avoid which you may find helpful https://www.homeloanexperts.com.au/qbe-housing-outlook/

    If you’d like our help then please complete this form and one of our specialist mortgage brokers will call you https://www.homeloanexperts.com.au/free-quote/

  • Faraan Shareef

    I am a permanent resident in Australia residing with my family (PR Holders as well).
    My mom and dad want to buy property in Australia (villa, townhouse, new dwelling) but they do not hold any kind of Australian visa. Is this possible? What is the procedure like?
    Thanks

  • Hi Faraan
    Yes this is possible. They will need FIRB approval https://www.homeloanexperts.com.au/non-resident-mortgages/firb-approval/ which is relatively easy. They can get a loan as a non-resident foreign investor however in most cases the maximum amount they could borrow would be 60% of the property value https://www.homeloanexperts.com.au/non-resident-mortgages/foreigner-mortgage/
    If you’d like our help to get them approved then you can ask them to complete this short enquiry form https://www.homeloanexperts.com.au/free-quote/
    You could also consider just buying in your name as it’s usually easier.

  • Faraan Shareef

    Thanks for your quick reply.
    I’ll forward the link to them.

    What if they don’t need a loan and have ready cash. Does it change things?

    Moreover, once they own property in Australia, what kind of visa are they eligible for as this will be retirement planning?

    Thanks

  • If they have enough cash to buy a property then the FIRB rules are the same. It should be easy for them to buy as long as they are buying a new property and it is used for investment purposes (i.e. rented out not a holiday home in Australia).
    They may pay additional stamp duty if they are buying in NSW, VIC or QLD https://www.homeloanexperts.com.au/non-resident-mortgages/foreign-citizen-stamp-duty/
    I’m not sure how owning property in Australia affects their ability to get a visa here. Potentially this visa would work https://www.border.gov.au/Trav/Visa-1/405- but I would recommend calling the Dept of Immigration or speaking to a migration agent.

  • marta

    My husband and I have been in the process to buy a property to live in. We have been living in Sydney since August 2014 and we own a 457 visa (TEMPORARY RESIDENT), but in February we will apply for a 186 visa ( PERMANENT RESIDENT).
    We actually were not aware of the not resident surcharges and we were going to sign our contract in two weeks time.

    What I would like to ask you is:
    -which are all the tax that a foreign investor has to pay?
    -With a 457 visa could not we have already been considered as residents?
    -If no, is there any possibility to have a refund of these taxes as soon as we become permanent residents?
    Thank you for your availability,

  • Hi Marta,
    Thanks for posting.
    – You’d pay 4% extra in NSW. Once your PR is granted you would’t pay this. https://www.homeloanexperts.com.au/non-resident-mortgages/foreign-citizen-stamp-duty/
    – As a 457 visa holder you would still need to pay it. If I made the rule it would be different but unfortunately the government has set it up this way.
    – Not that I am aware of.

    If you like call us on 1300 889 743 and we can assist with your home loan. We’re experts in both temp residents and PR holders. If you PR is not too far away I’d just wait until you get PR.

  • marta

    Thanks for your reply,
    I would have to pay the 4% extra and also the approval fee from the FIRB?

  • That’s correct. The FIRB fee would be $5,000.

    Best to wait! As much as Australia needs new new schools and hospitals it’s better that you save your money,

  • marta

    thank you very much for your advise.
    we’ll probably wait!