Investing in Australian property has become increasingly popular among foreign investors and Australian expats looking for strong returns and stability. But is it really worth it? The answer depends on what you want to buy and your individual situation. For example, if you are looking to purchase a house to live in or an investment property, the decision-making process may be different. Recently, I had two real estate experiences with my 23 and 27 year old children, both of whom were in the process of moving out of home.
One had a lease liability of 9 months and the other was able to negotiate without any liability in a shared house. Some developers have already obtained approval from the Foreign Investment Review Board (FIRB) for their entire development, which means that you don't have to worry about it if you buy a newly built unit. When it comes to buying agents, some will charge a fixed fee while others will charge an upfront fee as well as a percentage of the purchase price of the property. If you decide not to use a buyer's agent, it may be wise to use comparable sales to value the property.
Over the past year, the apartment market has not grown as strongly as the housing market. However, with the price differential between units and homes at its highest level on record and homes becoming increasingly unaffordable for many people, I anticipate continued growth in family-friendly apartments in large neighborhoods. It is important to note that if a buyer's agent is selling their own properties or receiving a commission from the developer, they are not acting on your behalf as a buyer's agent. This phenomenon, in which an initially higher purchase cost is slowly reduced by inflation over time, means that buying will be cheaper if it is done over a sufficiently long period of time.
In reality, you won't need to seek FIRB approval until you've found a property, but it is wise to start researching your requirements for avoiding ineligible properties. If you are not an Australian resident or have a temporary visa, you are legally required to obtain permission from FIRB before purchasing property in Australia. Your shipping agent or lawyer will tell you what checks you need to make before buying and will let you know when it is safe to sign the contract (sales contract). Ultimately, taking the risk of buying when other people are selling can often pay off in asset markets - this is known as a “counter strategy”.
