Why Australia is a prime target for overseas property investors?
For a long time now Australia has been a hotspot for investing in property with people all over the world vying for a slice of the Australian real estate market. According to the Reserve Bank of Australia (RBA), foreign investment in residential property has grown from $6 billion a year in the 1990s to more than $17 billion in 2012/13. The year after that, the value of foreign approvals for home purchases was more than 12% of total dwelling turnover.
WHY INVEST IN AUSTRALIA?
There are four core factors that make Australia a great place to invest:
The latter is particularly significant - with such a large amount of planned infrastructure projects in the pipeline, it means a widening radius of areas that could experience significant capital growth.
The other significant attraction of Australia as an investment location is its rapidly growing population. The 2015 Intergenerational Report recently revealed that, by 2054-55, Australia's population is expected to grow to nearly 40 million - an increase of almost 17 million. There is currently a shortfall of 9 million homes in regard to this target.
WHAT KIND OF PROPERTIES CAN INTERNATIONAL BUYERS PURCHASE?
Broadly speaking, foreign buyers can only purchase new homes or vacant land, and only for investment purposes. You will have to seek prior approval from the Australian Foreign Investment Review Board once they've chosen the property they want to buy. Once you've applied, you should receive a decision between 30 days.
THE ESSENTIALS OF BUYING AN INVESTMENT PROPERTY IN AUSTRALIA
Before making your investment, be sure you're aware of the full cost of investing. You'll need at least 5-10% of the purchase price to make a deposit, as well as enough to cover supplementary expenses, such as:
Most foreign buyers can borrow 80% of the property's value, allowing them to avoid the cost of lenders mortgage insurance.
In order to successfully invest, you'll also need to get the right investment finance. Some lenders now offer the same features and interest rates on mortgages for non-residents as they do for more typical borrowers, including extra repayments, 100% off set accounts and the option of interest only loans.
Thanks to the record low interest rate environment currently prevailing in Australia, there's never been a better time to invest.
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