Information For Foreign Investors About The Australian Property Market

Australia has established itself as a lucrative market for Asian investors who are looking to purchase property overseas. There are primarily two objectives of buying property overseas, to either generate wealth through investment or gain residency. However, getting the ownership of your Australian property and sealing the deal might not be as straightforward as you might think. There are few things Asian investors need to know before investing in the Australian property market.

You can also take help of top real estate agencies to get a grasp of the Australian property market and learn about the various issues a foreign investor would encounter.

1. Performance Of The Property Market Varies From City To City

Australia as a whole offers an attractive investment environment for selling theproperty to Chinese investors. It boasts of a stable GDP growth with a consistently low rate of interest and unemployment. However, the property outlook can be different from city to city. The Australian housing market delivered a total annual return of 14.7% in 2016 after factoring capital gains and gross rental yields. Driven by strong growth in population and robust economic activity, the cities of Melbourne and Sydney experienced positive market performance in property along with the smaller cities of Canberra and Hobart.

Things are completely different in resource and mining centred cities like Darwin and Perth. These cities saw weak housing market conditions and are looking for growth shortly. All in all, investors need to take time to research the market conditions and carefully evaluate different cities based on records and future growth.

2. Not Every Property In Ideal For Investment

Unlike any residing Australian, a foreign investor is only allowed to buy certain property in Australia such as:

• A new dwelling built on residential land which has not been previously occupied or sold in the last 12 months.
• Vacant land designated for residential development
• Certain established dwellings, which have been designated for redevelopment.

It is also important for foreign investors to note that there are conditions and exceptions to the rules and regulations. In general terms, foreign non-residents are prohibited from purchasing established or second-hand dwellings that have been previously occupied or sold to use as rent out, homes or holiday homes.

3. Obtaining Australian Home Loans Might Be Challenging

If you need a loan to finance the property purchase, the first thing you need to do is, ensure that you are eligible for applying for a loan in Australia. This eligibility depends on your nationality. Some countries’ tax laws make it difficult and even impossible to obtain financing in Australia.

In addition to this, several banks of Australia have stopped lending to foreign investors owing to difficulties in accurately verifying the sources of foreign income. The non-bank mortgages are also available. However, the investors have to pay a higher rate of interest and encounter a complex lending process.

4. Importance Of Tax Regulations And Implications

The Australian tax system is highly favourable to Australian property investors from abroad. You need to structure your property purchase with a sensible level of borrowing and take advantage of tax incentives to dramatically reduce the amount of tax you pay on your investment.

I am Eva Watson, a professional writer having an experience of writing articles on real estate, health an nutrition, travel,food, various educational courses, roofing and home decor among others. Apart from this, I love travelling & listening music.