Thousands of kilometers separating Russia from the Green Continent are not a hindrance for those who decide to buy real estate in Australia. There are many reasons prompting Russians to invest overseas. Among them: steadily growing prices for Australian housing, rising rents, which will make it profitable to invest, the desire to emigrate and live in a comfortable country. According to the Mercer's Quality of living survey, in 2021, of the 30 best cities in the world to live in, five are in Australia. Consider how profitable buying Australian housing is, and whether it is difficult for Russians.
What is Australian real estate
According to a study by Scope Investor Services, the Australian real estate market is one of the safest in the world to invest in.
Before investing money, it is important for the buyer to determine what type of property he needs. Residential real estate in Australia means:
- housing of primary and secondary funds;
- buildings in the planning or construction process;
- free land for construction.
More than 70% of Australians prefer a calm, quiet and secluded life in their own homes to city apartments.
House (rural house), as a rule, is located on a land plot - from 4 to 40 acres, depending on the proximity to the city.
Houses are built from plywood (fibro), revetted with siding - these are the most affordable options.
A more reliable, but also more expensive option is a house with low set brick veneer. Most private homes in Australia are of this type.
The most expensive, but even more comfortable, is the double brick house - a house with a two-brick wall. It should not be forgotten that in winter the temperature in Australia can drop to 0 degrees and snow falls.
The most common types of houses in Australia are:
- one-storey house - lowset;
- two-storey house with a garage on the ground floor - highset;
- two-storey residential building - double story house.
The house, located on a plot of more than an acre, is an acreage house.
Often on the site, in addition to the indicated buildings, there is also a separate house. The Australians call it a granny flat - this is a small house in which you can settle relatives or rent it out.
Among the advantages of private houses is the ability to build a covered wooden veranda (patio or deck) on the site, completely enclose the courtyard, build a shelter for a car (roof on poles - carport), arrange a swimming pool.
Urban housing is represented mainly by apartments:
in a modern multi-storey building - unit (with 2-3 bedrooms) and studio (combined living room, bedroom, kitchen);- in two-, three-storey buildings - apartment;
- in old one-story houses - flat.
in a modern multi-storey building - unit (with 2-3 bedrooms) and studio (combined living room, bedroom, kitchen);In the areas adjacent to the center, there are residential family complexes (gated complex) of two-story townhouse with small courtyards.
In a quiet suburban area - quarters of one-story small villas for retirement living citizens.
For comprehensive information on who is eligible for retirement benefits, the amount of retirement benefits, benefits, and how to generate additional income, read the article "Pension in Australia in 2021".
Take a sociological survey!
Where and how to look for property in Australia
At the first stage of buying real estate, the Russian buyer must find the best option. You can search while in Australia, and this, of course, is the best way - there is an opportunity to see and touch everything.
About the adaptation process after moving, in which cities it is better to settle down, how residents treat immigrants, read the article “The Life of Russian Emigrants in Australia”.
The second option is to make a purchase at a distance, without leaving the Russian Federation. In this case, you will have to limit yourself to photos and videos and rely entirely on the agency. The buyer's interests must be represented by a licensed real estate agent from the state, and best of all - from the area in which the selected housing is located.
You can choose an agent on a specialized site - ratemyagent.com.au, which has collected more than 600 thousand reviews of acting agencies and agents from all over the country. To search, you just need to enter the desired settlement.
Regardless of where the potential buyer of real estate lives - in Australia or in Russia, it is more expedient to start your search with the Australian real estate website - realestate.com.au - the most extensive resource on which most agencies from all states of the country post information.
Searching on the site is easy. First, you need to set the search parameters.
First, specify the desired city or state - select the one you want from the menu.
Brisbane.png
Australian states and their abbreviations:
| State name and capital | State symbol on the site |
|---|---|
| New South Wales, Sydney | NSW (New South Walles) |
| Victoria, Melbourne | VIC (Victoria) |
| Queensland, Brisbane | QLD (Queensland) |
| South Australia, Adelaide | SA (South Australia) |
| Tasmania, Hobart | TAS (Tasmania) |
| Northern Territory, Darwin | NT (Northern Territory) |
| Western Australia, Perth | WA (Western Australia) |
| Capital Territory - Canberra | ACT (Australian Capital Territory) |
Secondly, you need to indicate the type of dwelling you want, then - the minimum and maximum bedrooms (in Australia, the size of housing is calculated by the number of bedrooms) and the price range - the minimum and maximum prices that suit the buyer. Click "Search".
A new page will display the search result - all that match.
To reduce the number of proposals, you can use the "Filters" function - for example, specify the desired number of bathrooms, the presence of a garage, pool and balcony, heating, etc. Then click "Update".
The site provides an opportunity to get acquainted in more detail with the option that attracted the buyer more than others: see the presented photos, take a video tour, see the exact coordinates on a Google map, get acquainted with the main characteristics of housing, with a list of schools nearby, etc.
If you are interested in the option, then you can agree on a visit to the house. Information about visits for inspection is also reflected on the website.
To record, you need to click "Contact the agent". In the form that opens, you can clarify all your questions by writing a letter. You can also call the specified phone number.
It makes sense to search also on the proposed sites - domain.com.au, homeguru.com.au, etc. They also have a wide range of commercial real estate in Australia.
You can search directly through agencies such as Jenman at jenman.com.au, Little Real Estate at littlerealestate.com.au, or Stephen Smith Real Estate at stephensmith.com.au.
A lot of useful information about real estate sales can be found in the Australian press announcements - Financial Review, The Age, The Herald Sun, The Sidney Morning Gerald, as well as on specialized message boards:
- buysearchsell.com.au,
- advertisers.com.au.
Most Australian media are linked to Domain - domain.com.au, which sells and leases both residential and commercial real estate and is automatically redirected to that site when it comes to finding a home to buy.
There is another option - to search the sites for a plot of land for construction, as well as offers for the planned construction (off plan). Such apartments exist so far only on drawings and are cheaper than already built housing. However, the risk is also greater: if the housing is not built, the buyer will lose the deposit paid when the contract was signed.
How much is a residential property in Australia
After a slight decrease in the growth of real estate prices in 2021, their growth has been observed again since mid-2021. Average home prices within Melbourne and Sydney are around AU $ 700,000 (one Australian dollar (AUD) equals € 0.62 or $ 0.68).
In other state capitals, the average price was:
- 398 thousand AUD - in Darwin;
- up to 438 thousand AUD - in Perth;
- 457 thousand AUD - in Hobart and Adelaide;
- 490 thousand AUD - in Brisbane.
Prices in the province are lower - up to 378 thousand AUD.
At first glance, housing prices are very high even in the outback of Australia. If you look at the situation in more detail, you can see that here, along with really high real estate prices, it is quite possible to find a house or apartment at an affordable price.
Real estate prices in Australia in 2021 depend on the value of land and construction costs, and are formed based on the following components:
- location in relation to a large city (city) or city center, if we are talking about an urban area;
- remoteness from the ocean coast (the farther - the cheaper the land);
- presence or proximity to infrastructures - bus services, roads, metro, proximity to schools, hospitals, shopping centers;
- type and material of housing construction, size of the land plot;
- characteristics of the area of residence. For example, a plot with a house that is ideal in terms of price and location may be in the vicinity of public housing for the poor (housing comission) or in the path of planes taking off near the airport.
When buying residential real estate (primarily urban), you should remember that there are additional costs, which include:
- Body Corp or body corporate. This is a payment for maintaining the entire apartment complex in proper condition (minor repairs, replacement of burnt out lamps, maintenance of a communal pool or gym, etc.). From 800 to 3,000 AUD can be issued per year.
- Rates - payments to the municipality for the improvement of the city: maintenance of cleanliness, landscaping, street lighting, maintenance of sports and playgrounds. A year - about 1 300 AUD.
- Utility bills for electricity, water, sewerage, etc. - up to 1 200 AUD per year.
One of the interesting options to save money is to build a house yourself. More precisely, to assemble a prefabricated house (kit home). To do this, you need to complete online training at abed.com.au and obtain an owner builder license for 240 AUD.
Such a DIY kit can be bought on the iBuild Building Solutions website (i-build.com.au) and delivered from state capitals to almost anywhere in Australia (750 AUD for every 100 km).
The average price of such a folding house, equipped with everything you need, excluding delivery, is:
- with one bedroom - 70 600 AUD;
- with two bedrooms - 125 410 AUD;
- with three bedrooms - 218,170 AUD;
- with four bedrooms - 257,275 AUD.
Permanent residents of Australia have the opportunity to enjoy some benefits. For example, many states provide them with preferential conditions for the purchase of their first home - they completely or partially remove the state duty, which allows them to save up to 20 thousand AUD.
A lot of useful information about the life of Australians is presented in the article “Australia: the life of ordinary people”.
What documents may be needed to buy a home
Australian law allows foreigners to acquire real estate in the country, but at the same time limits them to certain conditions. So, a foreign citizen who does not have an Australian indigenous, permanent or temporary residence, is forced to pay annual fees, from which residents of the country are exempted. He cannot purchase secondary housing (except for commercial premises - motels, hotels, etc.).
It is allowed to purchase secondary housing for personal residence by temporary residents with a long-term visa (for a period of more than 12 months). But when the term of the permit to stay in the country expires, such a foreigner must sell the house or apartment within three months.
A document that a foreigner cannot do without when buying real estate is a permit for foreign investment in any residential property (for non-resident foreigners), for temporary residents - for the purchase of secondary housing (Established Dwelling Certificate).
The exception is students: subject to the purchase of housing no more than 300 thousand AUD and the presence of a letter from the educational institution. The application must be submitted online to the Foreign Investment Review Board (FIRB) - ato.gov.au/FIRB_Notification.aspx. The issued certificate is valid for 6 months and obliges the foreign buyer to register his property after purchase with the Australian Internal Revenue Authority - ato.gov.au.
By the way, those wishing to study on the Green Continent will have information from the article “How to get education in Australia”.
In some cases, when buying a new home (off plan), the developer receives an exemption certificate in advance, which frees the foreign buyer from having to obtain this document himself.
How to buy residential property in Australia
If you have the required certificate from FIRB, you can proceed to the purchase / sale process. It can take from 30 days to several months.
The algorithm of actions may differ depending on where the buyer is and what kind of property is in question. If the buyer is in Australia, the algorithm will be as follows:
- Search for housing. Contact with a real estate agent or manager of a construction company for the sale, submitting an official request to the agent, visiting the site (if possible).
- Drawing up a contract, signing it and making a deposit of 1% of the value of the property.
- Hiring a lawyer in the state in which the transaction takes place, transferring the contract to him. From this moment, the countdown of the purchase process begins - the lawyer studies the contract within 5 days. During this period, you can cancel the transaction and return the deposit (minus 0.25%).
- Solution of the financial side of the issue. The transaction must be paid not in rubles, but in Australian or American dollars. If a sufficient amount is available, then the issue is resolved. If not, then the foreign temporary resident buyer can apply to the bank for a mortgage. Mortgage terms will not be as favorable as for residents. It is necessary to deposit at least 30-40% of the value of the purchased property, pay from one to 30 years with an annual rate of 4 to 6%. You can learn more about this on the website of financial brokers - homeloanexperts.com.au/free-quote/. If the Australian bank agrees to provide a loan, the contract is considered confirmed.
- Checking the technical (building and pest inspections) and legal condition (conveyancing) of the property, including such nuances as the flood zone, the design of gas and overpasses, etc. If the results of the inspection do not satisfy the buyer, he may demand to revise the price. eliminate deficiencies or abandon the transaction.
- Transfer on the 21st day of 9% of the amount to the account of the developer or owner, after which the contract acquires the status of unconditional - unconditional, and the buyer formally becomes the owner of the property.
- The final stage is settlement, when there is an exchange of documents (title) and the transfer of money and keys.
If the buyer is located outside Australia, for example, in the Russian Federation, all steps must be taken remotely - through a hired agent and a lawyer. If you need to take a loan from an Australian bank, you will have to come to the country yourself - you cannot get a mortgage agreement without a personal signature.
However, it should be remembered that buying Australian real estate does not provide any advantages in obtaining a residence permit or opening a visa.
Learn about the procedure for obtaining a work visa to Australia.
What should be reflected in the contract of purchase / sale of housing
The documentary registration of the sale and purchase of real estate can be illustrated by the example of the state of Queensland. The set of documents includes:
- clarification of the rights and obligations of the buyer, the buyer's consent to the proposals;
- agent declaration;
- directly the contract.
The contract must contain:
- The clause on the possibility for the buyer to interrupt the transaction without special sanctions - Cooling Off Period (as a rule, within the first five days with a penalty of 0.25%).
- The right to an independent assessment of the condition of the property (moisture, termites, cracks, etc.) and legal advice (the presence of debts, arrest, etc.) - from 7 to 14 days.
- An indication of the value of real estate, taking into account a comparative analysis of the market, prices for similar objects 5 km from the dwelling, prices for the last six months.
- In case of applying for a mortgage - Subject to finance. Bank approval usually takes 14 days.
- Clarification of inclusions and exclusions: what is part of the sale and what is not - stoves, antennas, hot water systems, trees and plants, fans, air conditioners, letter boxes, etc.
The seller has the right to include the Sunset close clause - the ability to terminate the deal until Unconditional upon receipt of a better offer. The document comes into force after it is signed by all interested parties.
Additional costs when buying Australian real estate
Speaking about how much it costs to buy a house in Australia, it should be borne in mind that, in addition to the price agreed with the seller, the foreign buyer will have to incur a number of rather significant expenses.
- First, in accordance with the laws on the introduction and collection of fees for foreign acquisitions and investments in 2021, each application of a foreign citizen for permission to acquire real estate in accordance with the established tariffs is levied. After indexation for 2019-2020. the following tariffs have been introduced:
| Purchase price (USD) | Fee (USD) |
|---|---|
| up to 1 million | 5700 |
| 1-2 million | 11500 |
| 2-3 million | 23100 |
| 3-4 million | 34600 |
| 4-5 million | 46200 |
- Secondly, foreigners pay an increased state duty on the purchase of housing in Australia (Foreign Buyer Duty). Its size depends on the value of the property and the state in which the purchase was made. You can calculate the amount of the fee using a special calculator - stampduty.calculatorsaustralia.com.au. So, buying an apartment in Sydney for 600 thousand AUD for a foreign buyer will require paying, in addition to 22 719 AUD duties, an additional 48 thousand AUD. For a similar apartment in Adelaide, another 42 thousand AUD must be added to 32 050 AUD, in Darwin foreigners pay the same as local residents - 23 thousand AUD.
- Third, property tax in Australia. If the property generates income, then it is taxed (ato.gov.au/Rates/Individual-income-tax-for-prior-years/?page=2): - 32.5 cents for every dollar earned (up to 90,000 AUD ), then the rate increases. For example, from amounts from 90,001 to 180,000 AUD, you will need to pay 29,250 AUD plus 37 cents for every dollar over 90,000 AUD. If there is no income or it is paid off by payments of interest on the loan, income tax is not paid.
- Fourth, the annual tax on absentee land is the Absentee Land Tax. Foreigners who own the housing in which they live are exempted from this tax. But when renting it out or if you have another place of residence, the tax must be paid as an absentee owner.
- In 2021, the tax rate is 1.5% of the value of the property. So, a foreigner in Victoria, owning real estate in the amount of 500,000 AUD, must pay the state government 8,275 AUD annually, which can be calculated using a calculator - e-business.sro.vic.gov.au/calculators/land-tax. A resident of the country will pay Land Tax in the amount of only 775 AUD. From 01.01. In 2021, this rate in most states will be increased to 2%.
- Fifth, associated costs:
- payment for the services of a lawyer - 700-1,000 AUD;
- inspectors for technical examination of housing - 300-500 AUD.
For information on the peculiarities of the tax system, the purchase and maintenance of real estate and other issues related to withholdings and fees, see the article “Taxes on income, property and salaries in Australia”.
Real estate in different states of Australia: briefly about the main
Let's take a quick look at the features of the Australian states:
- Queensland. Famous for its subtropical resorts, the Gold Coast is especially famous - a resort town on the east coast of Australia near Brisbane with large sandy beaches, surfing and national parks. The prices are correspondingly high.
- N.S.W. Has an oceanic subtropical climate. Differs in high real estate prices. It is the most populous state and the most expensive of all the states to live in. Many immigrants strive exactly here - to Sydney, Gosford and other cities. After the 1989 earthquake, which hit Newcastle the most, there was a temporary downturn in the real estate market. Since then, everything has been rebuilt and demand has grown again. A more profitable option to acquire real estate here is to buy a piece of land and build a house on it. It is better to buy ready-made housing in small seaside towns - Wollongong, Byron Bay.
- Victoria. The smallest state, but the second most populous. Here is Melbourne - the cultural capital and the most comfortable city for living in the country. Here are the highest prices. More accessible - in Bendigo, Ballarat.
- South Australia. It has a Mediterranean climate. Luxury real estate in Australia is in demand not only in Sydney, but also in Adelaide. Rural land prices are more affordable (more than a third of the population lives in rural areas).
- Tasmania. The coolest and most environmentally friendly state in the country. Residential real estate on the island is relatively inexpensive compared to other states.
- Northern Territory. The third most populous state with an abundance of national parks. Food prices are higher here than in other places, but there is practically no cold weather (there is no need to heat the house).
- Western Australia. The largest state with an arid climate, rich in deserts, semi-deserts, and beaches. Two thirds of the population owns their own homes. The most popular are the 3-bedroom dwellings.
A few tips for those looking to buy Australian property
According to the opinions of Russians living in Australia, the auction is not the best, or rather, the worst way for a buyer to acquire real estate in Australia. There are a number of reasons for this, the main one of which is that the check of the condition of the real estate in this case occurs after the signing of the contract and if the house is damaged by termites, no one will compensate for this.
There is also a difficulty with a mortgage: if the bank delays the decision, then 10% of the deposit from the value of the house will be lost.
If a suitable option is found, but the inscription is under contract, and not sold, this means that the house has not yet been sold, but is already in the process of the transaction, and the contract involves a number of conditions, including obtaining a mortgage. Therefore, there is a hope that the buyer, having not received a loan, will refuse to buy - and the house will again appear on sale.
It should be borne in mind that when non-residents of Australia sell real estate with a value of 750,000 AUD and more, a tax of 12.5% of the amount is withheld by default. In case the house is sold for the same price (or less) for which it was bought, the tax must be refunded. To do this, you need to issue a tax number. Its registration takes 2 months, so you need to take care of this in advance.
At the moment when the contract receives unconditional status, it makes sense to contact the insurance company with which the buyer intends to cooperate after buying the house, and take out free insurance for the period of the transaction. Then, in the event of an insured event, compensation will be paid in full.
Instead of a conclusion
Russians' interest in Australian real estate continues to persist. While buying a home does not provide an advantage in obtaining a residence permit in Australia, many see investing money in local housing or commercial properties as a profitable investment.
To buy a home in Australia, Russians do not have to travel to a distant continent. All stages of the transaction can be arranged through a trusted agent and a lawyer using the Internet.
At the same time, high housing prices and the policy of the Australian authorities trying to improve the situation in the real estate market through benefits for permanent residents and restrictions for non-resident foreigners should be noted as disadvantages.
Buying Australian real estate will become more profitable when you immigrate to this country.
