What's available? Australia is a huge continent, and yet most of its population lives along a few, fairly small stretches of the extensive coastline. And even along the parts of the coastline which are inhabited, there are only a few significant centres where most of the country’s residential real estate would be either available or of interest to foreign purchasers. In short, the coastline cities are the hubs of Australia’s jobs, schools, universities, financial markets, creative endeavours and entertainment. If ranking Australia’s cities in order of their "real estate significance" to foreign purchasers, we would start with Sydney, in the State of New South Wales, then go on to Melbourne (Victoria) and Brisbane and the Gold Coast (Queensland) and then Darwin (Northern Territory), Perth (Western Australia), Adelaide (South Australia) and Hobart (Tasmania). Click here for a map of Australia, indicating the major cities. The inland city of Canberra (Australian Capital Territory) is also a significant hub, being the centre of Federal Government activity. The Gold Coast, south of Brisbane, is a tourism and employment centre where there is a great deal of real estate development and off-the-plan selling. The real estate advertisements in the major newspapers of these cities, (generally the Saturday editions), list most of what is available for sale in each city and its surrounding suburbs. These papers are:
SYDNEY, MELBOURNE and CANBERRA have the added advantage of services known as The Home Price Guide. The Home Price Guide tells you the prices properties have sold for in the suburb that interests you over the last 12 months (or longer, if required). For example, you may be interested in buying a two bedroom apartment in Sydney’s suburb of Kensington, which is very close to the University of New South Wales. A copy of The Sydney Morning Herald Home Price Guide’s computer generated report on what has sold in Kensington over the past 12 months, and the price each property sold for, will considerably shorten your research time. If you are interested in buying a particular two bedroom apartment in Kensington, for example, the price guide can tell you what similar apartments in the suburb, the street, even the same block have sold for over recent months. Reading this will give you a good idea of price expectations for that size and type of property in that specific suburb. Foreign buyers are also interested, obviously, in getting some idea of the kind of neighbourhood they are looking to buy into. Is the neighbourhood close to parks and sporting facilities? What is the financial demographic of the area? What is the ethnic composition of the area? APM's Postcode Snapshots provide an instant overview, a snapshot, of the real estate, facilities and population make up of the suburb you are interested in (currently only covers Sydney and Melbourne). Click here to access the Postcode Snapshot. Type in the name of the suburb or its postcode (Australia's equivalent to America's zipcode) to get the snapshot covering your area of interest. All these guides are important tools for seeking independent factual information on your area of interest. Click below to order a Home Price Guide.
Once you have narrowed down your choice of suburbs and appropriate property within those suburbs, you need to speak to a local agent who is selling in that area. You will get better attention from an agent if you tell him or her that you are a "qualified buyer", which means you have your finances arranged up to a certain point. It is important to remember that real estate agents are employed to represent the interests of the seller. But without buyers there can be no sale. Once you have established where you would like to buy, it might be worth contacting your local office of an Australian real estate agency. They in turn, might be able to put you in touch with the right agent office in Australia. Click here for details of major Australian real estate agents with internet sites. Alternatively, you may like to contact the real estate agent listed in the newspaper advertisements for the properties that interest you. Many large residential developers sell their own properties rather than use a real estate agent. Click here to link to a list of major Australian property developers.
The buying and selling of real estate in Australia is a source of considerable revenue for both state and local (municipal) governments. Any purchaser of property in any state of Australia must be aware that there are many "extras" and duties attached to any sale - and the purchaser is responsible for paying them. The main State and local government fees to be aware of are:
All these charges vary, sometimes considerably, from city to city, council area to council area. Your solicitor or the agent selling to you can tell you the exact amounts for which you are liable. The banks and other mortgage lenders all obviously charge interest on the money you borrow to make your property purchase. But they also have a number of fees they may or may not charge you, or may offer you a discount on, when you take out a loan with them. Check with your lender the extent to which the following fees and charges will apply to you:
Other expenses involved in a property purchase include:
A real estate agent is paid commission by the person selling the property (known as "the Vendor") but is not paid anything by the purchaser.
You should not be alarmed by the unfamiliar vocabulary used by Australian solicitors, banks and real estate agents when you are dealing with them. Most of these terms are just as unfamiliar to any Australian buying a property as they are to you!
A sentence like "Attrac. br.v. dble.fr. cott. with l.u.g. and i.g.pool", which could easily be found any day of the week in Australia’s real estate advertisements, can be translated! Click here for some of the most common abbreviations used in Australia’s real estate advertising.
When a purchaser expresses interest in buying property in Australia, the seller or his agent presents the purchaser with a contract so that initial checks can be made about the property. The contract will show the seller’s name/s, address, a brief legal description of the property being offered for sale, a price or a place for a price to be inserted after an auction has taken place, details of any light fittings, blinds, carpets or other goods which come with the house, the local government’s ‘zoning’ of the property (which tells an purchaser what is and is not allowed to occur in or on that property) and so forth. The contract, particularly those used in New South Wales’ property sales, can be very detailed, long and confusing. Usually, the purchaser will pay for a solicitor to look over the contract on his or her behalf before negotiations go any further. As you will probably not know of any solicitors in the Australian city or town you’re wanting to buy in, you can ask the bank you’re dealing with to recommend someone, ask a large law firm in your own city to nominate the agents they use in Australia’s cities, or contact the Law Society (there is one in each state of Australia) for their recommendations. Some of the Law Societies have websites as well. Click here for the phone numbers of Law Societies in Australia. It is not a good idea to use the same solicitor as the one being used by the seller of the property you are buying, or a solicitor recommended by the real estate agent working on the seller’s behalf. If a purchase goes ahead, the process known as conveyancing starts. Conveyancing can be described as the process by which the ownership of a property is transferred from the name of the seller to the name of the buyer. Most purchasers pay for a solicitor or a conveyancer to undertake the conveyancing process on their behalf. It is legally possible for an untrained individual to go through the processes of conveyancing, and save paying fees to a third party, but this takes up considerable amounts of time and involves a lot of running around. It would be virtually impossible for a person to do this from outside the country, or without very fluent English. The solicitor who looked over your contract in the first place can continue on with the conveyancing or you can use a conveyancing firm in every state or territory except the Australian Capital Territory, Queensland and Tasmania.
If you are buying a property at an auction, or have authorised an agent to buy it for you, you will need to pay a portion of the selling price (usually 10 per cent, which the real estate agency puts into a trust fund until the purchase is complete) as a deposit immediately the auction is over. You or your representative will also have to sign the contract on the spot too. After an auction, there is no "cooling off" period in which to change your mind, renegotiate the price, or make any other changes. If you buy through private treaty (which means you negotiate privately with the seller or his/her agent to buy a specific property), you have a five day cooling off period in which to change your mind, or suggest alterations to the contract. Many people use this cooling off period to arrange a building inspection and a pest inspection, to see if there are any major structural faults with the property that the naked eye could not see, or whether there is any kind of pest infestation (eg termites) which will undermine the structure of the building in the future. If a big problem is found within the cooling off period, the prospective buyer can choose not to go ahead with the purchase, or negotiate a cheaper price. Remember! If you are buying at an auction, all these inspections should be undertaken before you consider bidding, as there is no cooling off period after an auction. The ten percent deposit which the seller’s agent holds, is usually placed in a trust fund where it earns interest - sometimes a reasonable amount. This interest is shared between the seller and the purchaser when the sale is finalised, at what Australians call "settlement". Settlement usually takes place six to eight weeks after contracts are "exchanged" between the seller’s solicitor or conveyancer and the purchaser’s solicitor or conveyancer. If you pull out of a purchase, either after a purchase at auction, or after the private sale 5 day cooling off period is over, you will forfeit the ten per cent deposit you placed on the property. This money will go to the seller, who is then free to sell the property to somebody else. If you decide to pull out during the five day cooling off period, you must pay 0.25 per cent of the purchase price to the seller. Cooling off rights can be waived (given away) if you choose to do so. Sometimes purchasers will do this if it looks as though another purchaser is very keen on the same property and is ready to exchange contracts right away. FIRB approval should have already been given to you to buy a specific property before you bid on it at an auction. Otherwise you may bid for a property, buy it, put down your ten percent deposit and have no cooling off period, only to find that you are NOT given FIRB approval. If this should happen, you will lose your ten percent deposit and any chance of owning the house. It is very important that your legal advisor checks the contract for you before you bid at an auction, or attempt to buy privately, because any contract between an Australian seller and a foreign citizen is supposed to include a clause allowing 30 days for FIRB approval to be sought. Stories about the real estate market being falsely inflated are sometimes heard from real estate agents selling in suburbs popular with foreign citizens. There are stories, for example, of foreign citizens bidding 30 percent or more over the price everyone expects a property to get because this is the property for which they have been given FIRB approval. They do not want to let someone else buy that property so bidding (sometimes against "dummy" bidders, or "plants" placed by the seller’s real estate agency) continues way over the expected price. They know that finding another suitable property and seeking FIRB approval on that place will take time, keep them away from their families and businesses, and there is a possibility that their application for approval on the second property will be rejected. Understandably, foreign citizens sometimes "overbid" at auction on an FIRB approved property and, also understandably, many prefer to buy an approved property privately, for an agreed price.
|
