How to Invest in Australian Property From Abroad
Investing in Australian property has become all the rage with overseas investors recently, and ex-pats are looking for a stable and safe return to the country. As the popularity of Australian property increases, there is more information on how foreign investors or those with temporary visas can qualify for home loans.
This is an added benefit when looking to buy property in a foreign country. Especially with its flattening curve for COVID-19 cases, Australia has become one of the few countries considered a safe place to invest in, coupled with attractive property investment plans for foreigners.
Why should you invest in Australian property?
Stable property prices
The main reason is Australia’s property market has a proven record of stable prices. As of now, the economy has been anything but volatile; it has not suffered any significant crashes that can affect the property market.
The consistent growth of the real estate industry
The properties have also enjoyed consistent growth over the last 100 years, with prices doubling every 10 years. Adding to that, Australia does not have very restrictive foreign investment laws or banking regulations that make it difficult to invest. You do not need to be a citizen or set up a business to be able to apply for investing in properties.
A great choice of residence
Australia is one of the best places to live, with scenic beauty, sunny beaches, reefs, and a stunning northern territory known for its outback experience. The universities are making a name for themselves internationally, and we see a large influx of foreign students.
How do you invest in property if you’re not Australian?
Foreign investors are welcome
Whether you’re an investor looking to buy property for commercial reasons or just a home for yourself, you can do so under the new legislation (December 2015) for foreign investors to purchase Australian property.
Policies and restrictions in place
Australia has foreign investment policies in place to regulate the stability of its property market. You are allowed offshore investments with certain restrictions from the Foreign Investment Review Board (FIRB). As a non-resident, you can invest in new and pre-construction residential development.
Your investment ought to be channeled through the housing sector to increase the supply of new residential properties. Thus, many new properties are purchased by foreign investors.
You can invest in pre-construction properties as long as the property has not changed hands and has been vacant for more than 12 months. After applying for an investment, it is reviewed and approved by FIRB within 30 days of the application submission. You will submit your application before purchasing a property and prepare a contract before obtaining approval.
As a non-resident, you can purchase houses without being subject to any conditions. However, acquiring established dwellings is not allowed for foreigners. You can apply for loans to buy property in Australia and invest in a property with easy, simple procedures.
Financing support options
Your financial support from the bank depends on your visa type and situation. While some banks are strict about foreigners applying for loans, you’re going to find most of them with great opportunities for you.
You can invest in a mortgage broker from the country, so they can act as an intermediary between the institution and borrower. They can assist you in qualifying for a foreign mortgage. This will save your time and money of having to visit the country before buying the property. It will also increase your chances of getting a lower interest rate.
Seeking advice from mortgage brokers of the country you’re planning to invest in property will make the process less complex and help you understand both the real estate and financial system better.
What kind of deposit amount should you have in mind?
It is a smart practice to have a target price in mind while purchasing your first property in Australia. To secure a home loan in Australia, you need around 20% of the property value; however, you can buy a property with a low deposit amount as well.
The minimum deposit varies and can go as low as 5% of the property’s price. Regardless, it is important to keep in mind that as a foreigner, you’re going to have a larger deposit than usual, as it is difficult to secure mortgage insurance, i.e., a type of insurance policy that covers mortgage lenders against potential losses of you borrow more than 80% as loan and are unable to pay it.
Moving to a country such as Australia will be an exciting experience regardless of your reasoning. While it is somewhat of a challenge, it is one country that you’re going to find out has a much simpler process of acquiring property and laws that work in your favor.