Who can buy property in Australia?

Foreign investors are required to obtain approval from the Foreign Investment Review Board (FIRB) before purchasing property in Australia. The FIRB is a government body responsible for overseeing foreign investments and real estate transactions to ensure they comply with national guidelines. Foreign investors are typically limited to purchasing new dwellings, such as newly constructed homes or apartments, and vacant land with the intent to build. Existing (or established) properties can generally only be purchased by foreigners if they intend to redevelop the land.

Foreign investors must submit an application to the FIRB for approval before proceeding with any property purchase. However, there is an exemption to this rule: if a foreign buyer is purchasing property jointly with an Australian citizen, a permanent resident of Australia, or a New Zealand citizen, FIRB approval is not required.
This framework is designed to encourage foreign investment in the construction and development sectors, supporting economic growth, while protecting the availability of established housing for Australian residents.

Do the research

Investing in Australian real estate is attractive due to the country's stable economy, high living standards, and well-regulated property market. Australia’s major cities like Sydney, Melbourne, and Brisbane are global hubs with growing populations, which drives continuous demand for both residential and commercial properties. The real estate market has shown long-term growth and resilience, with steady property value appreciation in prime areas.

Australia’s legal framework for property ownership is transparent and investor-friendly, and foreign investors are allowed to purchase new properties under certain regulations, providing opportunities for capital growth. The country’s strong infrastructure, quality of life, and appeal as a destination for immigrants and students contribute to rental demand, offering investors the potential for strong rental yields. Additionally, Australia's political stability and low interest rates make it a secure environment for real estate investment.

Here are some sought-after destinations for real estate investment in Australia:

• Sydney - As Australia's largest city and a global financial hub, Sydney is a prime destination for real estate investment. Suburbs like Bondi, Manly, and Darlinghurst are highly popular for their proximity to the beach, vibrant lifestyle, and world-class amenities. The city offers a range of property options, from luxury apartments with iconic views of Sydney Harbour to family homes in quieter neighborhoods, making it an attractive location for both residential and commercial investments.
• Melbourne - Known for its rich cultural scene and diverse architecture, Melbourne is a top choice for real estate investors. Areas such as Southbank, Docklands, and Fitzroy offer excellent opportunities for investment in high-rise apartments and mixed-use developments. The city's status as a hub for arts, education, and tech sectors makes it appealing for both investors and renters, with a stable demand for residential and commercial properties.
• Gold Coast - With its stunning beaches, sunny climate, and tourist-driven economy, the Gold Coast is a highly desirable location for real estate investment, particularly in luxury vacation homes and resort-style living. Popular areas like Surfers Paradise, Broadbeach, and Burleigh Heads offer strong returns on short-term rental properties, appealing to both investors and those seeking holiday homes.
• Brisbane - Brisbane, the capital of Queensland, offers a more affordable alternative to Sydney and Melbourne but is rapidly growing in popularity among investors. Suburbs like New Farm, Kangaroo Point, and South Brisbane provide attractive investment opportunities in residential properties, particularly with the city's ongoing infrastructure developments and population growth driving demand.
• Perth - Located on Australia’s west coast, Perth is known for its relaxed lifestyle, booming mining industry, and relatively lower property prices compared to other major Australian cities. Areas like Cottesloe, Fremantle, and Subiaco are popular for their beachside living, offering a mix of luxury homes and investment properties. The city's growing economy and strategic location make it a key market for long-term investment opportunities.
• Adelaide - Adelaide is known for its affordability, peaceful lifestyle, and cultural charm. Real estate investors are drawn to its suburban areas like Glenelg and North Adelaide, which offer strong growth potential in residential markets. With a focus on innovation and technology sectors, Adelaide is becoming increasingly attractive to investors seeking lower entry points with steady growth.
• Tasmania - Tasmania is gaining traction as an emerging real estate market due to its stunning landscapes and lifestyle appeal. Cities like Hobart and Launceston have seen a surge in interest from both local and overseas buyers. Tasmania's unique blend of natural beauty, affordability, and a growing tourism sector makes it an appealing choice for investors seeking vacation rentals and lifestyle properties.

Where to find properties online:

• https://www.realestate.com.au/
• https://www.domain.com.au/
• https://www.allhomes.com.au/

Financing

Foreigners can obtain mortgage loans in Australia, though the process may differ from that for Australian citizens and permanent residents. Many banks and financial institutions offer mortgage options to non-residents, but they often require a larger deposit, typically around 20% to 30% of the property's value, with some lenders asking for up to 40%. Lenders will also ask for proof of income and financial stability, which may include documentation of income from overseas sources, and they might request additional documents such as tax returns.

Due Diligence and Sales Contract 

In Australia, the property sales contract, commonly known as the "Contract of Sale," is a legal document that outlines the terms and conditions agreed upon by both the buyer and the seller. This contract includes essential details such as the purchase price, payment terms, deposit amount, and specific property information, including any fixtures or inclusions. Once signed by both parties, the contract becomes legally binding, and the buyer typically pays a deposit, usually around 10% of the purchase price, to secure the agreement.

It is crucial for buyers to conduct thorough due diligence before signing the contract, including property inspections and obtaining relevant disclosures. Engaging a qualified solicitor or conveyancer is highly recommended to navigate the intricacies of the contract and ensure compliance with Australian laws and regulations. These professionals can help identify any potential legal issues, assist in negotiating terms, and guide buyers through the settlement process, ultimately safeguarding their interests and facilitating a smooth transaction.

Property Buying Costs and Taxes in Australia

Footnote to Transaction Costs Table

The round trip transaction costs include all costs of buying and then re-selling a property - lawyers' fees, notaries' fees, registration fees, taxes, agents' fees, etc.

Real Estate Agent's Fee

Typically, real estate agents in Australia earn a commission ranging from approximately 2.00% to 2.50%.