Buying a house in Australia is not easy!

by Mark Benson on March 12, 2009

in Australia, Jobs in Australia, Property in Australia


Buying a house

Buying a house

After landing your job overseas, the very next thing you need to find your accommodations in your new country. Accommodation means finding a home as well as furnishing your new residence. It may seem like a simple job to do but you can only find suitable accommodations only after doing research. Many fall into the trap in believing that the foreign country’s system is the same as the one you had in your old home country. 

This discussion is all about purchasing property in Australia but the lessons that can be found here can be used everywhere in the world. Each property market in the world has their own specialized system and nuance but the process of purchasing overseas is quite similar across many property regimes.

Location

Most people moving to another country tend to gravitate to the highly urbanized centers of the country. The problem though in doing this is the high cost of living in these metropolitan areas and the sudden fluctuations of the property costs in the cities. It may be better to look outside these main city areas and choose smaller lesser-populated communities where the costs of property would certainly be lower than in the city. In Australia, most people tend to choose their residences in Sydney, Melbourne or Adelaide and forget the other areas in the country.

Cost

The first rule you need to learn is that you would never be able to find a place like or similar to your old home in your destination country. This starts with the cost of the property as where your new location is dictates the cost of the property. Often, the property would cost a lot higher so you need to stretch your finances or at least put off purchase until you can cover the payments for purchase. What you must do is research on the local property markets, the process of purchase and taxes payable to be fully aware of the financial impact the purchase of property would entail on your overall monetary capacity.

The property market in Australia

The property market in Australia provides to main means to transact properties. The first one is called the closed bid while the second means is called an open auction. On top of the purchase price, there is a so-called 10% increase that goes to the vendor. This occurs in many transactions and confusion to many individuals that move overseas to Australia.

Closed bid situation

A closed bid system is done by individual buyers forwarding their offers to the owner in sealed envelopes. In this system, no one knows the offer or the price for the property being sold. The decision is reached by the owner and the sale is consummated by the acceptance of the offer and after inspection of the property.

A variation though of this sealed bid system occurs when the property is advertised for sale. A price may be quoted on the advert and it is with the plus above the floor price set that differentiates one bid from another. This is where the confusion arises as many place the 10% over in their sealed bids.

Open Auction

On the other hand, an open auction is where bids are stated in public for the purchase of the given property. Often, people raise their offers at sight and the highest offer often purchases the property available for sale. This is a more expensive way to purchasing property, as the bids escalate between the offers made for the property.

Single party sales

If there is only one party participating in the purchase of the property, then it is best to negotiate with the seller instead of having a sealed bidding process. Negotiating with the seller is the traditional method in the purchase of properties not only in developed countries such as the United Kingdom and Australia. This also allows better understanding between parties and exploration of other means to facilitate the transfer of the property.

Alternative ideas for accommodation:

Build your own property

One option that may be able to save you a lot of money is in building your own property during your stay overseas. Before doing so, you need to have very detailed information as to the local property market as well as property regulations in your projected build location. Though this may be a cheaper alternative, it is the most risky ones as there are many issues that may arise in the short term.

Company sponsored housing

One of the perks of overseas employment is the inclusion of housing provided by the employer for a limited period of time. This would allow for ample time to adjust to the country of employment as well as find a suitable residence for your needs. With this facility, you are able to acclimatize better into the new country where you would be residing in the next few years. Though not all companies are able to provide this, it is best that you prepare for your own personal options in finding the best residence in your new country of residence.

Conclusion

Moving to another country is highly dependent on the location of your property when you search for accommodations. In countries such as Australia, where many overseas workers move to, accommodations are dependent on employment and they offer housing in their employment package.

Property acquisition processes and ordinances differ according to countries and even particular locations.  It is best that you learn about the language, the negotiation processes and the vendor expectations. In knowing all these, you are able to avoid the pitfalls and errors that many fall into and thus avoid paying for your mistakes. In Australia, many have become confused with the closed bid system but still many choose to live in Australia for a new life and purchase a property anywhere. The problems in purchasing property are similar to most systems when moving overseas. One of the differences though in some countries, there is an availability of short-term accommodations for employees though not all are given this opportunity. Thus you need to be fully aware of the future that lays ahead of you before you board that plane to move to another country.

{ 1 comment… read it below or add one }

Karen November 23, 2010 at 5:20 am

You also need foreign investment review board (FIRB) approval if you are on a temporary visa. There were changes made in April 2010 that migrants on temporary visa could apply to FIRB to buy a residence but they would have to sell it if they decided not to stay in Australia.

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