Procedures and precautions for buying a property in Australia
Australia has always implemented measures to restrict overseas people from buying properties. In addition to the approval of the Foreign Investment Review Board (FIRB) for overseas people to purchase properties in Australia, there are also restrictions on the types of properties that can be purchased. In order to ensure that local residents have the ability to buy houses, the Australian government also restricts non-permanent residents from buying second-hand buildings, so as to ensure that residential prices in the second-hand market can remain stable. In some areas, stamp duty on properties has also been increased and a number of additional taxes for overseas investors have been added.
According to the <<2020 Global Life Report>> released by CBRE, Hong Kong’s property prices are the highest in the world, with an average of US$125, equivalent to HK$9.78 million, and US$1,987 per square foot, or more than HK$15,500; The rent is also the third highest city in the world, at US$2,682 per month, or approximately HK$21,000. Faced with high property prices in Hong Kong, the dream of home ownership can be described as very far away. Compared to Hong Kong, property prices in Australia are lower, with an average of about HK$3 million. Even if the Australian government has introduced a number of measures to restrict the purchase of properties by overseas people, maintaining property prices in Australia at a relatively low level is still very attractive to people who intend to immigrate or invest in Hong Kong.
The following is the procedure for buying a property in Australia:
1. Understand your own financial ability and situation, and choose the suitable area and type of your own property:
Generally, independent houses are far away from the train station and are loved by those who like quiet life. Since owning a detached house property means owning land, and Australia has less and less land, so the long-term return is better.
Most people who work or study will choose to rent residential units, because residential units are usually closer to the train station and the rental returns are better.
Buy land and build a house
Buyers who purchase land must complete land development and build new houses within 4 years.
Overseas people buying or investing in properties in Australia must apply for FIRB online to obtain the qualification to purchase properties. Generally, the approval process will be completed within 30 days. There is no limit to the number of new buildings, but each purchase requires FIRB approval. Buyers can pay attention to whether the real estate has FIRB quota when purchasing real estate. If not, they must apply to FIRB.
3. Hire a suitable real estate agent
When a suitable property is available, the buyer needs to reserve a deposit for the real estate agent. After receiving the deposit, the real estate agent will notify the developer to keep the unit chosen by the buyer. The deposit is generally AUG5000 to 8000 (HK$3000 to 48000). After submitting the deposit, there will be a cooling-off period of 7 days. If the buyer decides not to purchase during the cooling-off period, the deposit will be refunded in full.
4. Entrust an Australian lawyer to handle legal documents
To purchase an Australian property, the buyer needs to entrust an Australian lawyer to deal with legal documents. The real estate agents hired by general buyers can introduce local lawyers. The developer’s lawyer will prepare the contract of sale for the buyer. After receiving the contract of the property sale, the buyer’s lawyer will review it before handing it to the buyer and explain to the buyer the content and arrangement of the property sale and purchase contract. The document has the buyer’s signature for verification.
5. Pay 10% down payment
After the two parties sign the property purchase and sale agreement, the buyer needs to prepare an initial deposit of 10% of the property price within the time specified in the contract (usually 7 days) into the developer’s lawyer’s trust account. This trust account is supervised by the government. It will be paid to the developer after completion, and the developer will not be able to use this fee during this period.
6. Buyers apply for property mortgage
Buyers who need to apply for a property mortgage are best to apply for a property mortgage 3-6 months before the handover, so as to reserve enough time for the bank or related institutions to approve.
7. Building inspection
When the property is completed, the developer’s lawyer will notify the buyer’s lawyer. The buyer can inspect the building in person or appoint a real estate agent to replace the building. During the building inspection, the problems of the relevant units will be recorded and repaired by the developer.
On the day of property settlement, the buyer needs to pay the balance to the developer to obtain the property key to successfully repossess the property.