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How to buy a house in Australia

Buying your first home can be an exciting and sometimes daunting process but there are many things you can do to make it easier on yourself.

If you plan ahead, keep an eye on the market and get good legal advice, you’ll have no problem finding a house that fits both your budget and your lifestyle. With that in mind, here are some things to consider when buying a house in Australia.

The Advantages of Buying Property


Buying property as an investment is one of your best options for building wealth over time. A home’s value will appreciate over time, which means your equity (what you own versus what you owe) increases. This makes buying property a great long-term strategy for accumulating wealth, while also improving your life. If you plan to live in it, buying a home offers plenty of benefits as well.

Buying property can be a complicated process


There are important legal, financial and cultural factors that make it challenging for people from different countries to purchase property. And if you’re trying to do it from overseas, it can be even more difficult. But buying property overseas is possible; you just need to know what you’re doing.

In fact, there are plenty of positives about buying property abroad—especially if you live and work here! Still, navigating foreign laws and regulations isn’t easy. So we’re here to help with our complete guide on how to buy property in Australia!

Finding the right place


Buying a house is a massive commitment, so it’s important that you choose somewhere that you really love. Choosing a place that’s too close to work might be convenient, but when you factor in longer commutes, lost time with family and missed opportunities for fun with friends, it might not be worth it.

You should also make sure your home matches your personality. For example, if you like peace and quiet, buying near bars or clubs may not be ideal—you can check out where different amenities are located using websites like Google Maps. Then there are practicalities to consider as well; how big do you want your garden? Where do your kids go to school? How far away from hospitals do you want to live?

Work out how much you can afford


Lenders generally require a deposit of at least 20% of your total purchase price. You’ll have more buying power if you have at least 30%. Use online calculators or sit down with your accountant and figure out how much you can afford to borrow. And if you don’t want to spend hours crunching numbers, then consider speaking with an experienced financial adviser who can walk you through it.

Doing your research


First, decide on your budget. While having an idea of what you are looking for will narrow down your choices, it’s also essential that you have an understanding of how much money you can afford for a deposit and monthly repayments.

Pay special attention to any hidden costs associated with buying a home (e.g., legal fees, stamp duty, property taxes) as well as make sure you factor in variables such as mortgage types, loan-to-value ratios and residual values. If possible, seek professional help or at least get some free advice from one of your bank’s staff or financial advisers before jumping into anything.

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The 5 Steps to Buying Property


The first step to buying property is deciding whether you’re going to buy a residential or commercial property. There are many factors that go into deciding which is right for you, including personal and financial circumstances, your current living situation and where you want to live. Once you’ve decided between residential or commercial properties, it’s time to take action.

It’s important that you do your research so that you’re aware of what loans are available as well as any conditions attached before applying for one. Generally speaking, there are two main types of mortgages: variable rate and fixed rate loans with variable rate being more popular due to lower interest rates than fixed rate mortgages.

After securing a loan, you’ll need to find an agent who can help you find suitable properties that match your requirements. When looking at houses, be sure to get independent advice from an estate agent who can give unbiased information about each property and its neighbourhood.

They’ll also be able to guide you through all aspects of purchasing a home such as legalities and paperwork involved. In some cases they may even be able to negotiate on your behalf when negotiating price. If you’re purchasing an established home, then it will likely require repairs and renovations before moving in but if purchasing off-the-plan (where no work has been done), then most developers will include construction in their purchase price.

The costs involved with buying property


From stamp duty, which is charged at different rates depending on whether you’re an Australian citizen or not, to lender mortgage insurance (which is required for certain loan-to-value ratios), there are many costs involved with buying property.

Remember too that these costs are just for buying it – other outlays such as maintenance and repairs will inevitably come along. By making sure you have your bases covered, you can avoid unwelcome surprises down the track. Before entering into any contracts for sale with your chosen agent or lawyer, make sure that all deposits and payments are held in trust accounts until settlement occurs – so if anything goes wrong at settlement time there’s no risk of being left short-changed.

Closing costs


The last thing you want is to lose out on that perfect property because of extra closing costs. Be sure to ask your real estate agent about all possible closing costs before signing on any dotted lines. Make sure you have enough money for these extra expenses and don’t be afraid to negotiate with your real estate agent. Also remember that mortgage payments are just one of several expenses associated with owning a home, so include budgeting for maintenance into your future plans. You never know when those rain gutters will need cleaning or replacing!

Conveyancing and stamp duty


Buying a property is expensive! Taxes on property purchases can be anything from 3-5% of the sale price. The best way to avoid paying these taxes is by buying property off-the-plan (i.e., before it’s built), or purchasing an established home that falls under certain valuation thresholds, where stamp duty doesn’t apply. Conveyancing fees are paid when transferring ownership of property; you’ll pay around $2000-$4000 for services on an average house purchase. You can mitigate these costs by doing your own research online or seeking out and negotiating with other conveyancers who may charge less than your initial quotes.

What’s going on with interest rates?


Interest rates are at historic lows. That’s not necessarily bad news for everyone. If you’re planning on buying or refinancing, it means you’ll pay less interest, which will save you money (though there are costs involved with every loan and mortgage). But it also means banks are going to be pickier about who they lend to and at what terms, which is more likely to result in rejection. If you’re looking at properties that were previously out of your price range, now might be a good time to start saving up for them.

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