How to go about getting an Aussie Property?I am not going into details on history, geographical position, culture, society, economy, etc.. of Australia which probably anyone researching for a place in Australia MUST or should have done so.
Even before you consider Australia to search for an investment / residential property, you have to do your own diligence and considers the following:
Step 1: Questions to individual
1. Why do you want to invest in a property in Australia?
2. Do you need to invest in a property in Australia?
3. What is the purpose of this property? E.g. for your son/daughter university accomodation, retirement stay, etc.. or Pure investment in property play.
4. Have you visited the city that your property is located?
5. Are you comfortable with the neighbourhood / city layout / amenities?
6. How long are you planning to hold to this property?
7. Are you familiar with properties in your hometown?
8. Do you own a property in your hometown? and so forth
In fact, the above list of questions for individual mindset of a property investor should go on. What I have done is to give a flavour of types of questions that you should be asking yourself prior to any commitment. If you have owned a property before in your hometown, then it will be easier for you to come out the list of questions adjusted to your needs.
Step 2: Hard facts
Valuation report of Residential properties in Australia does not come free. The amount varies between different valuers. It is different from Singapore as free valuations are available in some property website.
There are websites in Australia showing median prices for apartments (units) or houses (landed). Most of this websites are tagged to a property firm. To avoid any controversy, I will not list here but you can do your check in internet.
As of 6 Oct 2014, Reserve Bank Of Australia (aka RBA) has kept its board rate at 2.5%. This rate is reviewed every 3 months. As the loan rate is the lowest, Australians & foreign investors have been purchasing residential / commercial properties. Only recently, there is a slowdown in housing approvals by the authorities in certain states. However, construction booms are across various cities especially Sydney, Melbourne & Perth, etc..Though prices of residential properties have been growing double digits since YR2011, but demand for residential properties have been strong with population forecast that there will be a shortage in residential houses to match with the growth in population. (All details can be researched).
Step 3: How to find the property in Australia?
Australia has come out a property cooling measure some time ago that foreign investors can buy new residential projects only.
Therefore, do not go in any property firm in Australia thinking that you can buy 'resale' or properties in market. Resale properties can be auctioned or through a property firm.
For Singapore investors, there are a local bank (OCBC) willing to finance your Australian properties if it is for investment NOT for your own resident stay. For obvious reason, which I need not mention. Alternatively, you can borrow from ANZ, NAB, etc.. based in Australia. Depending on the bank rates / loan quantum and the property valuation report, you will be granted the loan.
Advantage of OCBC loan is the loan will be in Sing dollars and fixed upon completion of the residential project. Upon your loan is fixed, your foreign exchange gain / loss will be determined. Disadvantage is you will be subjected to TDSR ruling and OCBC is quite conservative in foreign property loans. (Do expect your financing to be around 60% of the full sum). Interest rate on Singapore denominated loan will be based on SIBOR + bank charge.
Advantage of ANZ / NAB loan is in Australia dollars and getting weaker against Sing dollar (Oct 2014). Disadvantage is the loan rate is about 5%++.
In Singapore, you can go to a Australian Property Seminar to know more about investing in properties. Alternatively, you can go down to the property developer directly in Australia for your dream property too.
There are risks involved placing your money in Australia for properties. Hence, most important as mentioned, review Step 1 & Step 2 before making the decision.
Happy investing!