After sorting out your finances and knowing how much you can afford on a home in Australia, you can then start to think about what type of home and location would be ideal for you.
Where should I buy?
One of the most vital things you need to decide when purchasing property is the location. Most buyers look in locations where their property retains its value, however your quality of lifestyle may trump this factor – for example if you want to live on a remote farm.
Research areas you are interested in, discover trends in housing prices, look at average prices for the area – you will soon know what you can afford and where.
Australia has one of the most coast-dwelling, urbanised populations in the world. More than 80% of the 23 million residents live near the coast.
Melbourne and Sydney are the more popular choices; however there are plenty of other cities and towns to consider. Many rural regions are growing, with more work opportunities created in the last five years.
Out of all the capital cities, Melbourne’s growth in house prices has outperformed the rest.
Sydney remains the most expensive city in Australia for the buying of residential property – 66% percent of its suburbs have a median cost of over $1 million. In terms of growth in the cost of housing however, it has stagnated along with Perth.
The 5% decline in house prices and the 3% decline in apartment prices nationally are due to the decreased availability of the stimulus for first home buyers and higher interest rates. If anything, now would be a great time to buy as prices have levelled out.
Helpful questions to get you started:
Are you single/in a relationship/have or are thinking about having children?
This will determine the size of property you should be looking at. The amount of bedrooms significantly affects the asking price. If you are planning on having children in the near future, add at least one extra bedroom.
Do you want a longer or shorter commute to work?
Do you absolutely hate the long time it takes getting to work everyday? Then focus your search on areas closer to town, bearing in mind that the properties become more expensive and smaller in size. A longer commute allows for a larger, cheaper property further out of town.
What do you value more, your time or your environment? If you can’t decide, compromise and look in suburban areas midway.
Do you prefer inner city or suburban living?
Inner city/urban – livelier, dirtier, more entertainment options (e.g. theatres, restaurants), close to work, condensed, walking distances.
Suburban/regional – quieter, peaceful, open-spaces, parklands, peak hour traffic, larger properties, less public transport, cleaner air.
Drive and walk around the areas you are interested in. Get to know them, visit them at all times of the day to get a feel for them. A suburb may be lively during the day and completely quiet during the evening with shops closed – find out before you buy there.
How close do you prefer to be to amenities?
Going shopping, seeing the doctor, taking the kids to school, going to the post office – how close or far are you happy to live from these services? Is proximity important to you?
What are your interests/hobbies?
Focus on how you love to spend your spare time. If your interests involve the outdoors, for example windsurfing, then a bay side/ocean locality would be a great place to start. Your lifestyle will be enhanced if you choose a location that suits who you are.
What can I legally buy?
If you don’t have Australian citizenship or a permanent residency visa, then you are considered a ‘foreign person’.
This means that you must obtain prior approval for any residential real estate from the Foreign Investment Review Board (FIRB), and are restricted to the types of properties you are able to purchase.
With approval, you can buy:
‘Off-the-Plan’ New Dwellings – They must be purchased from the developer and have not been occupied for more than 12 months.
Second-hand (Established) Dwellings – Temporary residents can buy one established dwelling to use as their residence in Australia.
Vacant Land – Single blocks can be bought for the intention of building one residential dwelling within 24 months.
The advantage of buying residential ‘off-the-plan’ property from developers is that the need for you to obtain government approval to buy it has been eliminated.
Developers gain Foreign Investment Review Board (FIRB) approval in advance, allowing them to sell 50% of their development properties to foreigners.
This means that these types of properties are extremely popular and sell very quickly. The downside however is that you must pay the developers premium.
Buying a residential second hand dwelling can involve more documentation and processes to surpass than a newly built property.
However there are a lot more homes to choose from and more of them offer fantastic views.
Buying vacant residential property to build a home on means you can build your ideal home from scratch.
Though you must begin building within 24 months of purchase – keeping in mind that you have to attain planning permission, hire architects and search for a good quality builder.
What are the types of properties in Australia?
Except in central city areas, the most common type of property in Australia is a free-standing, detached house with a garden.
200 square meters is the average sized detached house in Australia – almost double the size of the average newly built UK house.
In the inner city suburbs of the oldest cities in Australia, Melbourne and Sydney, you will find properties such as apartments and terraced houses.
Should I buy an apartment or house?
The choice really comes down to personal preference. It’s wise, however, to be aware of what some of the main advantages and disadvantages are to both types of property.
Once you know approximately what type of property you want and have found a few possible areas you are interested in, you can begin your search.
Start on the internet, looking at popular real estate services such as homesales.com.au.
You can also search in local papers, visit real estate agents and look at major newspapers that have useful weekend supplementary real estate sections.
What are the processes for buying property in Australia?
There are typically two processes of buying property in Australia:
Private Agreement
Agree a purchase price through the seller’s agent.
When accepted, pay a 10% deposit.
A subject to finance term contract or unrestricted cash contract is then decided upon. Certain states permit a 3 – 10 day ‘cooling off’ phase while others are unconditional from the moment your purchase offer is accepted.
Agree to a settlement date.
Organise all of your documentation, communications with your lender and local authorities (for the transfer of title to your name) through a solicitor or conveyancer acting on your behalf.
Settlement typically occurs 30, 60 or 90 days from the purchase date.
Purchasing at Auction
Aim to have finance pre-approved when buying at auction.
Set a realistic maximum bid and stay in control of your emotions – if you overbid and win the auction – you are liable to buy the house.
If you feel more comfortable, you can hire the services of a specialist real estate agent known as a buyer’s advocate.
They will perform the research and bid at auction on your behalf – for a fee.
At the auction, the auctioneer will reiterate the rules of the auction. As part of the rules, once a bid has been made it is binding.
Auction rules will remain valid for three days after the auction has ended.
If a property has been passed in at auction, it means that it has failed to reach the sellers reserved price.
It is then offered for confidential negotiation with the highest bidder for 10 minutes after the property is passed in.
If an agreement hasn’t been reached after 10 minutes, it becomes automatically accessible to all bidders for negotiation.
After a winning bid at auction, the same process is followed as for a private agreement, however the contract is not subject to finance and is unconditional.