Property Investment in Australia
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by Brian Turner
Guide to Property Investments in Australia
Price values in the Australian property market took a fall from 2004 to 2005 and have been struggling to recover ever since. Some are predicting that the market is close to stabilizing and that now may be the time to invest “Down Under.”
A large percentage of the Australians own there own home (over 70%). This leaves a large market for rental property. Rentals also serve the business community and tourism industry as well. Rental yields are climbing and the average to date is around 6%.
The policy for foreigners purchasing property in Australia is a fairly strict one. It requires that approval of the Foreign Investment Review board (FIRB). The Board examines proposals and makes recommendations to the Government about whether the sale should proceed. Foreigners who are in Australia for an extended period of time will still need to get approval from the FIRB.
Temporary Residents that have gotten permission to purchase property but are preparing to leave the country will not be able to keep the property they purchased with the permission of the FIRB. Arrangements will have to be made to sell the property unless the origional property was vacant land that has been developed.
Foreign Nationals do not need approval when purchasing property through an Australian incorporated company or unit trust.
Because of the restrictions for purchasing property, foreigners are advised to get FIRB permission before signing any agreement to purchase (the exception would be a purchase agreement that stipulates FIRB permission would have to be granted for the agreement to be valid).
Most transactions fees are split evenly between the buyer and the seller (when the totals are figured). They can run anywhere between 4% and 21% of the purchase cost. Typically the seller will pay the entire Agent fees and half of the Conveyance fees. The buyer pays the cost of the Stamp Duty, registration fees and half of the conveyance fees. It is always advisable to invest in legal advice when entering into any type of financial agreement.
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