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Buying Property in Australia

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Home in Australia

In the UK, as in most countries, the property market can be highly temperamental and unpredictable. This is due to unreliable levels of demand and can result in the worrying position many homeowners in Britain currently find themselves in. Demand levels in Australia however, is much more constant.

Business magazine BusinessWeek ranked Australia has the second best property market in the world in 2009 despite the onset of the global financial crisis and the market has been little affected since. Most properties in Australia have retained their value throughout the global downturn.

The mining boom centred in Western Australia has ensured the country's economy has avoided the pitfalls must of the rest of the world, including the UK, have had to weather.

While this has meant that the property market has been able to remain resilient in the face of the worst economic situation in a century, the resulting rising Australian dollar have put upward pressure on interest rates. This in turn has caused higher mortgage rates and ongoing costs for householders.

Just like the UK, the property market differs greatly by region and area; it is more than a little unfair to compare beachfront property in Sydney with Outback property in the Northern Territory.

Here are some median house prices across the eight capital cities as of December 2011 according to RP Data.

Average property values in Australian cities

Buying a house in Australia

There are a number of different ways to buy property in Australia, and all of them will have some significant presence on the Internet, allowing you to thoroughly research the market, the area and the actual property before you physically visit.

Open Houses

Open houses are typically scheduled by an estate agent, although they can occasionally be held by the owner. An open house will typically place on a Saturday or Sunday afternoon during which time any potential buyers can show up and have a look round the property alone, although the estate agenct will normally be on hand to answer any questions, provide info on the home.

Private sales

Private sales take place much the same as they do in the UK, an estate agent will advertise the property and handle any queries. Offers for the property will be taken through the estate agent and passed on to the owner for final approval. If no satisfactory offer is made, the house may go to auction.

Auction

Auctions are a very popular option in Australia, between 30 and 50% of all houses sold in the country are done so at auction.

The process creates a dynamic scenario which is conducive to an eventual sale. All legal documents are available for inspection prior to the auction and Contracts of Sale are available to be signed and exchanged.

Buyers interested in the auction format must be aware that pest and survey inspections are the buyer's responsibility and a 10% deposit will typically be required on the day.

Stamp duty

All property sales in australia are subject to a stamp duty (tax). Some states offer concessions but the eventual tax will be determined by the location, price of the house, property type and whether you are a first time buyer.

You will need to contact your local Office of State Revenue to find the exact amount to be levied:

Buying from overseas

While buying from abroad a few years before you intend to move can save large amounts of money in tax but you will need to get approval from the Foreign Investment Board first. The FIRB reviews proposals for offshore investment and advises the government accordingly.

First home owner grant scheme

The Australian government offer a grant scheme to reward first time home buyers as part of the First Home Owner Grant. Provided you are at least 18 years old and are either an Australian citizen, a permanent resident or a joint applicant along with one, the government will put AU$7,000 towards the cost of the property.

Mortgages

Securing a home loan in Australia follows a similar process as in the UK. Most Australians aim to pay off their mortgage within 25 years and you will need to place a sizeable deposit.

The type of mortgage you can afford will depend on your credit rating, the type of property you wish to buy and the amount of deposit you are willing to pay up front.

For more info on home loans, interest rates and comparitive deals, check these links:

Renting a home in Australia

Renting a home in Australia

Renting a home in Australia is much more common in Australian than in the UK and most estate agents will have extensive rental listings available.

Some of the most popular estate agents offering rental listings include.

Property in Australia will typically be let unfurnished.

Renting a room

If you are only looking to rent a room in an existing property, there are a number of sites you can use:

Rental contracts

Rental contracts will typically run for 12 months, although some will also run for just six. Breaking a rental lease can be very costly and is therefore inadvisable. If difficulties within the lease arise, each state and territory has an agency both tenants and owners can refer to in the event of a dispute.