Read on our guide to choose that perfect property, secure funding and get approved by the FIRB. Investment in Australian property has never been simpler.
Property types available for foreign buyers
The type of property you can invest in depends on your status within Australia. Non-residents who do not hold an Australian visa can only purchase newly-developed properties for investment, or properties which have been built as part of governmentally-recognised resort developments.
If you hold a temporary visa which enables you to reside in Australia on a short-term basis, you are authorised to purchase an already established property on the condition that you will occupy the property during your stay in Australia.
Permanent residents who have held their residence permit for at least 12-months have no restrictions on which type of property they can invest in.
Borrowing eligibility and deposit requirements
Unless you’re one of the lucky few with enough capital to purchase a property outright, you’re going to need to borrow if you are to invest in property in Australia. Again, how much you can borrow comes down to your visa type. Non-residents without a visa can borrow up to 80% of the property’s value, while temporary residents who hold certain visas (457) can borrow up to 90%, including Lenders Mortgage Insurance (LMI). If you are a permanent resident and have been for at least 12 months, you can borrow up to 97% of the total value. Again, this includes LMI.
Of course, these are just general guidelines, and different banks impose slightly different lending conditions on foreign nationals.
Most Australian lenders will accept your overseas income when they are considering your mortgage application, meaning that you don’t need to build up capital or work in Australia to be eligible for a mortgage.
Applying with the FIRB
All overseas investors are subject to approval from the Foreign Investment Review Board – or FIRB.
While this might sound a little daunting, don’t be deterred; by following our advice, you can make sure that your proposal is accepted.
One of the common mistakes investors make is to rush headlong into their application. As the FIRB will take 30 days to assess your purchasing and investment plans, it is understandable that some investors will want to get the process over and done with quickly. Instead, you should take some time to draft your proposal, and consult a mortgage broker before submitting to the board. This will greatly boost your chances of acceptance, as a broker experienced dealing with FIRB can advise you how to best approach the application process.
Applications from individual investors who want to purchase property to inhabit during their stay in Australia, and who agree only to sell the property on once they have left the country, will almost always be accepted by the FIRB. Additionally, most applications from businesses wanting to purchase accommodation for their senior executives will be approved, providing that the executives are named in the application and plan to reside in Australia for at least 12 months.
The purchase of a property on a governmentally-recognised resort development is also likely to be approved by the FIRB as is the purchase of any commercial property worth less than $5M.
Most rejected applications come from non-resident applicants who want to purchase a property to rent in Australia, however your mortgage broker can advise you on how to overcome this.
By following our advice, gaining acceptance from the FIRB is easy. Your dreams of owning property in Australia are one step closer to becoming reality.
Mortgage Basics is an ASIC authorised credit representative and mortgage broker specialising foreign residents and investors purchasing a property and securing finance from one of Australian Major Lenders. A job of a mortgage broker is to assist customers on choosing the right lender for the right property, giving free advice and assistance on entering the real estate market and help on fulfilling the eligibility requirement by assisting dealing with banks and regulatory authorities. Mortgage broker is funded by the lenders therefore customers do not need to pay for the service. The industry is heavily regulated by the Australian government. More information is provided in the Australian government website at: https://www.moneysmart.gov.au/borrowing-and-credit/home-loans/using-a-broker
Mortgage Basics has helped hundreds of foreign nationals to purchase a property and secure loan for their investments in Australia. In addition to friendly service in English, we have senior mortgage consultants available who also speak Chinese.