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Buying a house in Australia

Buying a house in Australia

by JJ Smith
written by JJ Smith

Are you a New Zealander wanting to buy a house in Australia?

Yes, you can! If you’re an NZ citizen buying property in Australia, everything works the same as if you were an Australian citizen buying property in Australia. You may even be eligible for the first homeowner’s grant.

However, if you are not an NZ citizen, depending on your visa and residence status, there are some restrictions for foreigners wanting to buy property in Australia.

Find below some advice on buying your dream home in Australia and some smart tips to avoid paying more than you need in fees and charges.

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8 mistakes that first home buyers make

8 mistakes that first home buyers make and how to avoid them

by JJ Smith
written by JJ Smith

It’s going to be the most significant purchase of your life that will either have you sitting pretty on the property ladder or send your finances down the drain. Learn how to avoid some of the property pitfalls.

Don’t make mistakes that can impact your ability to buy, apply for a loan or end up costing you more in the long run.

Good news for first home buyers is the crazy panic of 2016 and 2017 has eased.

New housing loans brought prices down for the first time in years in 2018.

First home buyers accounted for 29% of owner-occupier loans issued in May 2019, which is the highest number of new mortgages since 2012 and it is still on the rise.

It’s now easier to get a loan, stamp duty exemptions, State and Territory duty exemptions and grants offering a helping hand in the shape of the First Home Loan Deposit Scheme (which will assist up to 10,000 Australians get into their first home with as little as 5 per cent deposit) from January 1, 2020.

However, make sure you do your homework before househunting and aviod these rookie real estate mistakes.

1. Not being budget savvy

Don’t start looking online before you know how much you have to play with.

Get a clear idea of your budget before you go house hunting. Aviod getting hung up on a dream home beyond your means.

How to avoid: Use an online home loan borrowing calculator, or speak with a lender or mortgage broker to understand what the banks will be willing to lend you.

2. Not having that 20 per cent deposit

You can get into your first home without the standard 20%, but you will need to take out Lenders Mortgage Insurance (aka LMI). An insurance policy protecting the lender (not the buyer) from financial loss in the event you can’t make your home loan repayments.

How to avoid: For buyers unable to save the 20% deposit, who want to avoid paying for LMI, could tap into the First Home Loan Deposit Scheme if they make the cut. Or have a parent go guarantor for the loan to provide the additional security.

3. Not getting the reality of rates

Understanding interest rates is power in the mortgage world. Rates may be at historic lows, but what goes down must go up eventually. A first-time buyer purchasing today will likely be in a home loan for up to 30 years so it’s worth pointing out that interest rates were more than double their current status just 10 years ago.

How to avoid: Prospective buyers should read up on what’s influencing interest rates, so they’re not blindsided when rates increase. Make sure you constantly compare home loans to determine if there are better offers available.

4. Not having enough left over

It’s not just about the purchase price. Beyond buying, you need to consider the hefty costs of stamp duty, building inspection or strata reports, transfer fees, solicitor fees, moving costs, new furniture or even renovations.

How to avoid: Research additional costs before buying so you have money left over to cover any unexpected expenses or repairs. Set a buying budget so you can tally up all the possible associated costs.

5. Not getting reports

Too many first-home buyers try to cut corners when it comes to building and pest inspections or strata reports. Not doing a building and pest inspection will save a few hundred dollars, but that’s one of the biggest mistakes first-home buyers make.

Building and pest inspections or looking into the strata report of an apartment building are vital steps. If you aren’t aware of a home’s problems you could be out of pocket by tens of thousands of dollars.

How to avoid: Get an independent building and pest inspection done on each house you are considering or order a strata report to get insight on the financials of an apartment block you’re looking at.

6. Missing out on grants

Markets change and so does the assistance offered from Federal, State and Territory governments. The First Home Owners Grant differs in each corner of the country, but in most cases the grant is only for first-timers buying or building a new house or unit. In some places it can be used for established homes. Just how much you can get depends on a number of circumstances.

How to avoid: To understand which grants they may be entitled, and how much, first-home buyers should visit First Home website.

7. Falling for the frills

First-home buyers just need to remember not to get too emotionally attached to a property because of the furniture or styling. The home has probably been staged. Real estate agents want to sell you the dream but it’s not going to look like that once you move into it.

He added that the same idea goes for house and land packages or off-the-plan apartments. Don’t get wowed by the new designs and inclusions builders are showing. It could cost $100,000 to $200,000 more to get the same home than the basic advertised price.

How to avoid: Read the fine print and ask lots of questions of the builder or developer. Get it down in black and white what you’re actually signing up to buy.

8. Not negotiating

Not everyone is a born negotiator, but there’s no time like the present to learn some barter banter.

The power of negotiation doesn’t only apply to the purchase price but to haggling for a home loan. First-time buyers shouldn’t take the first mortgage on offer. You don’t know if you don’t ask.

How to avoid: Take a proactive approach and research what is available in the market and be prepared to negotiate on the interest rate to avoid paying too much.

Read the full article on news.com.au: https://www.news.com.au/finance/real-estate/buying/8-mistakes-that-firsthome-buyers-make-and-how-to-avoid-them/news-story/b3cb88138446fc747c82e03d57309fff

Related post: buying a house in Australia.

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Real Estate Investing

Real Estate Investing – 5 Tips for Buying a Property in Australia

by Marcus Phillips
written by Marcus Phillips

Are you considering the purchase of a property in Australia? Have you been visiting real estate websites so much, you are taking virtual home tours in your dreams?

If you have your heart set on a retirement home in a Australia, and need to send a sizable deposit before another buyer beats you to it, an online money transfer is a fast and secure way to make your down payment. Maybe you’ve negotiated a lucrative price on a property based on a short closing timeframe, or maybe you just don’t want to miss out on your dream home.

Whatever your motivation for buying a property in Australia, the financial and contractual processes don’t have to be complicated, time-consuming, or fraught with legal risk.

Here are five tips for expats (and soon-to-be expats) planning to move to Australia or expand their overseas property holdings.

1. Do Your Market and Regional Research

Whether you are buying your property from a stranger, a lifelong friend, or even a family member, it’s important to enter an iAustralia real estate transaction with your eyes open, your mind clear, and a firm grip on your wallet.

If you were buying a property in your own city, or across the country, you would likely work with a competent real estate agent and spend a significant amount of time touring homes and doing your due diligence. Yet when it comes to a vacation property or retirement home, there are many emotions involved.

Depending on your origin and destination countries, your eligibility and ease of securing a mortgage in a foreign countrywill vary. You may have to make a significant down payment of nearly 30%. Developer or seller financing arrangementsmay help you save on interest.  Be sure to budget for transfer fees or stamp dutyas part of your property purchase.

If you’re preparing to buy a property in Australia, ensure you do as much research as you would on a domestic property, if not more. You can find great resources on websites like RealEstate.com.auor Domain.

2.  Be Cautious about New Builds or Fixer-Uppers

Many countries have new home warranty programs and regulations. If you’re looking at new homes abroad, be sure to do your research on local developers, and understand the implications of builder-responsible defects.

Further, you can find reputable tradespeople through regional contractor associations like the Australian Construction Industry Forum.

These groups can help you navigate the local renovation market, as well as the local rules of law related to home zoning, building standards, and renovations. Or before you start your journey.

If you buy vacant land or a previously occupied home, avoid entering a private property transaction without representation. Get professional purchase advice from a certified local real estate broker, agent or reputable developer. You can also ask real estate professionals in New Zealand for referrals to their counterparts in Australia.

3. Understand Your Tax Responsibilities in New Zealand and Australia

You might live in your vacation home for a few months out of the year, the whole year around, or even use it purely as an income property via leases.  Do your due diligence on your tax responsibilitiesrelative to capital gains, safe-harbor provisions, income tax and any reporting responsibilities your home country requires, and the nation where you buy a property.

Rules, laws, and regulations have been mentioned a few times in this blog, yet it can’t be overstated. Mitigating risk when you set up residence in a foreign country is well worth the investment in hiring a local attorney or solicitor.

They can help you get important documents translated (not to mention translate the legalese) and advise you on potential legal exposures in your property purchase agreement.  If you already have legal representation in New Zealand, they might have a relationship with other firms in Australia.

You can contact the Australia Bar Associationfor additional guidance.  When you’ve decided to acquire a vacation property in another country, or you’ve found the retirement home of your dreams overseas, your emotions play a central role in your thought processes. Take the time to research the links offered above. You’ll minimize your legal and financial risk and get more enjoyment from your investment.

5. Mitigate Your Foreign Currency Exchange Costs

When you are paying a significant amount of money for lease payments, maintenance fees or to purchase a home outright, transaction costs can be prohibitive. Many banks and foreign currency brokers charge high fees, bury hidden costs and offer less-than-desirable exchange rates. Before you go to your bank, check out the prices offered by amoney transfer service providerwhich monitors multiple currency sources.

Fee-free, exchange-transparent money transfersare available, and you owe it to yourself to get the best return on your money. When you are buying a home, making your money go as far as possible is critical. Whether you are making a one-time lump sum property payment or incremental mortgage payments, remittances in the local currency can help you realize significant savings.

XE International Money Transfer
Marcus Phillips XE Money Transfer
Marcus Phillips
Director of Affiliates & Partnerships Australasia

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Latest news on Sydney's falling housing market

Latest news on Sydney’s falling housing market

by JJ Smith
written by JJ Smith

Home buyers urged to capitalise on lower prices while they still can

Buyers still have a chance to snag homes at well below prices being paid two years ago, but their window of opportunity could be closing due to recent market changes.

Sydney’s housing market has dropped 15% since 2017, but it is set to be reawakened soon with interest rate cuts producing ideal conditions for up-sizing families and first home buyers.

The cut rate is said to give new buyers an average saving of $700 per year in repayments. The cash rate is the lowest since the 1960’s.

The increased demand is meant to stop prices from falling but will not drive another boom due to the weakening economy.

Experts are hoping for much needed stability after years of boom to bust conditions. Buyers and sellers would get more certainty about pricing.

“It will be a flat market, not a rising one,” My Housing Market economist Andrew Wilson said. “A flat market … is good for everyone.”

Read the full article on News.com.au: https://www.news.com.au/finance/real-estate/sydney-nsw/home-buyers-urged-to-capitalise-on-lower-prices-while-they-still-can/news-story/be2730d48db0f62050d11768fc355b73.

Sydney becoming more affordable as property prices, rents and rates continue to drop

Things are finally looking up for Sydney’s long frustrated home seekers – buyers are spending less of their money on repayments and it’s quicker to save a deposit.

New buyers need to divert less of their income into repayments, now 46% of their income, down from more than half two years ago.

With the Reserve Bank of Australia announcing Tuesday a record cut to the cash rate, mortgages are set to become even more affordable. Several banks passed the cut on in full to their customers.

The average time it takes a buyer to save their 20% deposit has shrunk from 13 years to roughly 11. Assuming they earned the average household income of $94,588 per year.

The gains represented the first time Sydney’s housing market showed a prolonged improvement in affordability in nearly seven years.

The median price of a Sydney home has dropped close to 15% since the market peaked in July 2017 and is now about $808,000.

Home buyers are being helped by more affordable rents, which are making it easier to save. A home at Sydney’s average rental price will now chew up 32% of the average household’s income, down from 34% two years ago.

Home owners could also expect further improvements in affordability as prices continue to drop…

Read the full article on realestate.com.au: https://www.realestate.com.au/news/sydney-becoming-more-affordable-as-property-prices-rents-and-rates-continue-to-drop/?rsf=syn:news:nca:dt:spa.

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