The wife and I came across
an article in BT advising potential buyers on some of the pitfalls when buying Australian
properties.
Following may be especially useful
to first-time investors into Australia
1. Only brand new properties
All property purchases by
non-Australians must be approved by the Foreign Investment Review Board (FIRB),
which monitors the flow of foreign investment into Australia
2. Limited lending
Banks will usually lend up
to 80% of the purchase price of a property but with above market prices being
charged for offshore sales of brand new Australian properties, it is not
uncommon for bank valuations to come in significantly lower - sometimes at 40%
below contract price - which means the buyer has to fund the difference (caused
by the high price).
3. Inability to on-sell to the global market
Once the property has been
sold new to a foreigner it can only be sold again to a local. Often high-rise
apartments sold off the plan overseas simply do not appeal to the local market.
4. Unethical sales tactics
Developers have been known
to run property "education seminars" under the guise of giving free
property market information but with a hidden agenda of directing buyers to a
particular development. Fair Trading Offices across Australia
5. Conflict of interest
In circumstances where the
developer has arranged financiers, agents, solicitors and one stop shopping to
sell the development - those who the buyer may think have his best interests at
heart have close ties with the vendor and are financially rewarded if and when
the sale proceeds.
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