Buying a property in Australia
Before you buy a property in Australia you need to take into account the following things:
The popular locations
The main cosmopolitan areas are very popular with expats, cities such as Sydney, Perth, Brisbane and Melbourne. These areas provide the best potential for finding well paid skilled work, unfortunately as a result of these factors property prices do tend to be higher than other areas in Australia.
For the more adventurous expats a move to the coastal regions such as the Gold coast, Queensland and Cairns provide cheaper property, a booming tourist industry just ripe to be taken advantage of by budding entrepreneurs. Many Brit expats are establishing their own businesses in the area.
For even better value the rural areas of Australia provide cheap property and a more laid back lifestyle. Remember that Australia is a vast country and many rural communities are very isolated.
Australia is home to some of the strictest immigration laws in the world. Unless you fit a set criteria of what the country wants then there is a good chance you will not be granted a work visa. The Australian government prefers younger skilled couples. Nurses, electricians, teachers etc.., you can speed up the process if you can obtain sponsorship from a company that is part of the State Migration Plans.
Legal issues and FIRB
If you aren’t an Australian citizen, or permanent resident, it is likely that you will need to gain permission from the Foreign Investment Review Board (FIRB) before you can purchase a property. Once you have applied, the FIRB will give you an answer within 40 days, however it does reserve the right to extend this to 130 in unusual circumstances.
If you buy a newly-built property, or even a rural home, then you are less likely to have to seek permission from the FIRB – a solicitor will be able to advise you on whether the property that you are interested in is exempt or not.
The information required in your FIRB application is: your name, address, nationality, prospective property details, copy of your provisional contract, and your passport details. You also need to sign statements clarifying that the property is not to be rented out and that when you sell, you will sell to an Australian resident. It takes around one month to receive the result of your FIRB and you should be mindful to allow this time as a get-out clause in your property contract. If you are purchasing the property through a developer then it is their responsibility to apply for the FIRB. ‘Integrated Tourism Resort’ areas do exist and expats can purchase property in these without the need for a FIRB approval.
Typical Property prices
The average property price in Australia has dropped in recent years from the countries all time high prices. The global economic situation has affected house markets across the globe and Australia is no exception. The drop in prices is good news for expats seeking to get onto the housing ladder but the uncertainty means that the prices are likely to fluctuate. Rumours of a housing market crash have circulated so it is advised to research the market thoroughly before you buy.
Australia’s working conditions are considered to be some of the best in the world thanks in part to the job market being rigorously regulated by the government and unions. According to the 2011/12 salary survey the average pay is categorised as:
- Full-time adult ordinary time earnings: $64,650 per year
- Full-time adult total earnings: $67,110 per year
- Male full-time total earnings: $72,620 per year
- Female full-time total earnings: $57,520 per year
Average property prices
Property prices in Australia are relatively high but detached houses with large gardens, balconies, swimming pools and built-in ‘barbeques’ more than make up for the expenditure. The quality of life is very high and as such many expats decide to make the switch.
Average house prices in October 2011:
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A few miles can make a huge difference to the price of a property in Australia; apartments in central urban areas can end up costing up to $2,500 per square metre more than those in harbour-side developments a few miles further out. Land prices also reduce considerably from around 9 miles outside a city and are at their lowest around 16 miles from cities. The cost of land varies from as little as $40,000 for an average size suburban house a few miles from cities such as Adelaide, Hobart and Perth to over $350,000 for a similar plot close to central Sydney.
When searching for and buying a property in Australia, always use a licensed agent. The Real Estate and Business Agents Act imposes obligations and requirements on licensed agents, which protects both buyers and sellers by creating a source of legal redress in the event of error, loss, misrepresentation or negligence. The act protects deposits paid by buyers and prevents conduct which could be misleading or prejudicial to buyers, and is backed by disciplinary procedures; the act doesn’t apply to private sales where no agent is involved. A list of state organisations can be found on the website of the Real Estate Institute of Australia at www.reiaustralia.com.au .
Buying a property at auction
A large number of properties in Australia are bought at property auctions. The main advantage to the auction system is that sellers can sell quickly and buyers can usually save a fair bit when buying. You could find a bargain but be aware that many auction houses quote prices 10 to 20% below a property’s expected sale price in order to generate more interest. Property auctions are often advertised in local newspapers but if you aren’t able to be in the country at the time of auction you could hire an estate agent to find a house, bid for it at auction and negotiate the sale. Agents may charge as little as a few hundred dollars to bid at an auction or up to 3 per cent of the price if they conduct a search and secure a property.
Transferring property ownership
There are two stages to the Conveyance process in Australia; the first stage leads to an exchange of contracts and the second is the completion of the sale, where you become the new owner. Conveyance duties and laws in Australia vary with the state or territory. Before a deal is finalised the following process should have been adhered to;
- Check the title deed.
- Check the zoning certificate, issued by the local council, which specifies what the surrounding land may be used for (e.g. industrial or commercial development).
- A strata records search (for strata title properties), which includes checking that a building is adequately insured, identifying charges/levies, identifying any limitations or restrictions on the use of the property, and whether animals are permitted.
- Enquiries with the local council and utility companies as to whether the property is clear of debts.
- Checking the building inspection report.
- Checking the drainage or sewerage service diagram.
- Checking the pest certificate, this confirms that the building is free of pests, including termites.
Property conveyance in Australia is usually done by a solicitor or a land broker, land agent or settlement agent, although you can do it yourself.
There is often a fixed fee for conveyance, which can range from around $500 to $1,700. Shop around for the lowest rate, as some solicitors negotiate. Conveyance companies are generally cheaper than solicitors and usually levy fixed fees with no hidden charges.
It’s possible and legal to do your own conveyance, and there are a number of DIY kits available. However, you will need to do at least ten hours’ work and you require a good grasp of details.