5 things to consider when buying property in Australia

1. Cost of living
Australia was one of the very few countries to be relatively unscathed after the Global Financial Crisis. This has meant that the country has managed to get a reputation of being a very expensive country to live in. This is primarily due to the value of the local currency, the Australian Dollar which is now around parity with the US Dollar. This means for foreign investors it’s more expensive than ever before. In addition the cost of groceries has jumped up significantly as well.

2. Capital Cities are expensive
Australia boasts 5 of the top 50 unaffordable cities in the world. House to wage prices indicate that Sydney and Melbourne have some of the highest prices in the world to buy property. That said property continues to rise year in year out yielding positive returns.

3. Higher Interest rates
Unlike the UK, borrowing in Australia is expensive. Interest rates hover around the 5-6% mark depending on the Loan to Value ratio. However by using a local mortgage broker you should be able to get a competitive local interest rate.

4. Obtain the right visa
Australia has a reputation of being one of the strictest boarders in the world. Most foreign nationals (with the exception of New Zealanders) require a visa to enter the country as well as gaining the right to work and abode.

5. Additional Costs
Legal fees can range from anywhere from 1-2% of the purchase price. Land tax or stamp duty can vary from state to state so best check with the local authority for taxation information. It is recommended that you put away 5-7% of the total purchase price for additional fees or costs with buying a property in Australia.

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One thought on “5 things to consider when buying property in Australia

  1. Philip Soos

    For those interested in the Australian residential property market, below are a collection of figures illustrating long-term trends. Housing prices and land values are compared to a basket of fundamental metrics. Australians are fortunate because much data on real estate and financial markets are publicly available, going into depth not seen in other countries.

    http://macrobusinessforum.com/topic/8516918

    The data presented should provide more than enough evidence to suggest that Australia’s residential property market (specifically land market) is vastly overvalued, driven by debt-financed speculation and the relative non-taxation of land rent.

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