Facts for Foreigners Investing in or Buying Australian Property

A few good reasons why it’s good to invest in Australian properties

Buying real estate in Australia can be done by both citizens and non-citizens, with the latter having guidelines on how to purchase or invest. The main reason why foreign investors are drawn to Australian properties is that Australia has a proven track record of stable market prices. Let’s go over some facts:

• 70% of Australian households are home owners.
• Under-supply of housing has been noted in capital cities.
• Investors are protected by Australia’s responsible lending legislation.
• The prices in Australia never drop more than 20%.

Overseas properties found in Hong Kong and the USA experience market crashes the likes of which Australia has never even heard of. 70% price drops could cripple investors in these countries and leave them with nothing but huge losses in the end.

But if you’re a foreigner and you want to invest in Australian property, there are some facts that you need to understand.
First, any foreign investor can purchase property in Australia, but they have to go through the FIRB or Foreign Investment Review Board. Don’t worry, as only a few are rejected according to reports.

1. The FIRB only wants one thing from foreign investors in exchange for their approval: their investment must be something that supports national interest. For example, foreign investors that want to purchase Australian real estate need to make sure that their property can increase the Australian housing stock.
2. The approval can take as long as 30 days, under the Foreign Acquisitions and Takeovers Act of 1975. The Federal Treasurer has 30 days to consider an application and make a decision. An interim order can extend the decision-making schedule by as much as 90 days.
3. If the investor is a foreign government, it needs to notify the Australian government before making any direct investments whatsoever, regardless of the value of the investment. This applies to land acquisition and acquiring new businesses.
4. Again, regardless of value, foreign investors would also need approval to take interest in the investment in real estate (residential), vacant land, or buy shares and units in Australian urban land trusts or corporations.
5. Investors should make an application for the FIRB prior to the investment or transaction even. The government should give the go-signal before any contract-signing or agreement can be made.
6. Foreign investors cannot purchase 2nd hand houses, or what’s termed as established dwellings, unless they are operating an Australian-based business and they need a 2nd hand house for their Australian staff. In the event that the property is vacated or empty for 6 months, the investor needs to sell it.
7. Redeveloping established dwellings also need the approval of the FIRB. This is often approved because the FIRB believes that redevelopment can increase the housing stock.
8. Foreign investors can purchase multiple properties, but they call for individual applications. One property purchase is equal to one FIRB application.

Foreign investment is never a bad thing, especially in Australia. Get in touch with reliable agents (like me) for assistance.