Australian property market has a proven record of stable prices and strict guidelines to purchasing a home. Australian citizens and holders of permanent visas have no extra requirements when buying a home, however holders of temporary visas need to get a separate permission from Australian government for purchase of any piece of property. Property is usually sold at an auction followed by a formal offer and 10% deposit paid immediately.
How to buy?
It is common in Australia for houses to be sold by auction. A house auction often takes place at a front garden of a house being sold, creating a very dynamic and exciting atmosphere. Sometimes the auction can also take place at the auctioneer’s office. Unlike Ireland, it is less common for houses to be offered at a list price.
Once you win a bid you or an estate agent acting on your behalf make a written offer to the vendor. An offer is then accepted, declined or countered by the vendor. Once the offer is accepted, an agreement is put in place and will become a binding contract between both parties. After winning an auction bid for a house a 10% deposit is paid immediately with the final balance paid on the day of completion of purchase.
Where to buy?
Research conducted by RP Data outlines the most affordable spots across Australia to buy property with over 22 locations with median house price below AU$150,000. The cheapest town in Australia at the moment is located in Queenstown, Tasmania with a median house price of $91,000. In second place is Bridgewater, also in Tasmania, where the median value is AU$177,822.
The cheapest towns in other states and territories are Peterborough in South Australia with medium price of $104,071, Warracknabeal in Victoria with $105,864, Hughenden in Queensland with $119,846, Barraba in New South Wales with $121,117 , Moora in Western Australia with $193,637, Johnston in Northern Territory with $249,110 and Charnwood in Australian Capital Territory with medium price of $381,579.
Research conducted by Real Estate reveals the most popular areas across the country, where housing demand exceeds supply, are located in South Australia and Victoria. Seven of the top ten suburbs around the country are located in South Australia – Malvern, Goodwood, Kensington Gardens, Clarence Park, Norwood and Parkside with the other three located in Victoria – Croydon Hills, Clifton Hill and Park Orchards.
The top spots in Western Australia, currently very popular state with our clients, are Leederville, Mount Hawthorn, Brentwood, Carine and Bateman.
How to buy?
Australian citizen, a New Zealand citizen or a holder of a permanent residency visa, such as Skilled Migration visa which is a very popular visa subclass among our clients, have no extra requirements for buying a home.
However, to ensure relative stability of housing prices Australian government enforces strict regulations on holders of temporary visas purchasing property. Temporary visa subclasses include Employer Sponsored Visa (Subclass 457) or Regional State Regional Sponsored Visa (Subclass 489).
Prior to buying a house holders of a temporary Australian visa must submit an application to the Foreign Investment Review Board (FIRB) to get an approval from the Australian Government for the purchase of a house, apartment or land. If you are considering a few different properties, you must submit a separate request for government approval for each piece of property.
In order to get government approval for buying or building a house, you must intend to buy one of the following:
- A vacant land, as long as you start construction within 12 months of purchase.
- Units, townhouses and house/land packages in new developments, as long as the dwelling has never been occupied and there are no more than 50 per cent of the dwellings sold to foreign investors, aka non-residents and holders of temporary visas.
If you intend to buy a previously owned home, you must satisfy one of the following criteria:
- Buy a dwelling for a purpose of redevelopment that will result in an increase of housing supply as long as the house remains unoccupied during the redevelopment.
- You are a holder of temporary visa who has lived in Australia for more than 12 months.
- Companies can buy a home for their senior executives if they intend to live in Australia for more than 12 months.
Application Approval Process
A free application for the Government approval for buying a home must be done in writing by filling out a form which can be downloaded from FIRB. It takes at least 30 days for an application to be processed and the approval is valid for 12 months. More details can be found at the Foreign Investment Review Board website.
Temporary residents, who purchase a previously owned property in Australia, must use this property as their main residential address, are not allowed to rent it and must sell the property when it ceased to be a main residential address of the owners. If you wish to buy property off a plan from a developer, it is the developer’s responsibility to apply for a FIRB approval. Once the property is built, the owner has a choice to live in it, sell it or rent it.
On average, feedback from our clients suggests that the improved transportation options and wider spreading of employment opportunities into the smaller towns surrounding big cities increase the attraction of purchasing a house in cheaper suburbs or surrounding towns a few hours drive from big cities. Wherever you decide to purchase a home, we would advise you to seek legal advice from a lawyer practicing within the state where you are looking to buy a house. Consult the Law Council website to find a suitable lawyer.