Buying property in Melbourne

Buying property in Melbourne
shutterstock.com
Updated 2019-05-28 14:06

There is no denying that Melbourne is an expensive city, especially to buy. Melbourne is now one of the ten fastest growing cities with a population that is likely to increase by 10% over the next four years. Housing prices have doubled more than six times since the 1960s and today, one in three of Melbourne suburbs have a median house price of $1 million.

Buying a property as a non-resident

Due to massive Chinese investment in Australia, which drove up housing prices, the government introduced new laws in late December 2015. As a non-resident, you can only buy new properties, off-the-plan apartments, and vacant land. Non-residents are also required to seek approval from the Foreign Investment Review Board (FIRB) beforehand and will need to pay a fee, depending on the property's value. However, as a non-resident, there is no limit to the number of new houses you can purchase, it is just required to get FIRB approval for each.

Searching for property

There are great free sites you can use to browse the property market in Melbourne. Realestate and Domain are the most popular, allowing you to look for houses by price, suburb, and house type. You can also search online at your local real estate agencies in the area you would like to buy in. You can find houses and apartments for sale that will have an inspection time and then an auction time. Some places will only be for private sale, which means they will list an inspection time, but an offer goes in from the buyer, and the seller either accepts or declines it. A private sale is said to be more accessible and less costly than an auction as an auction will have you bidding up against others. QuickStats is a great way to get a quick snapshot of an area and allows you to understand demographics, incomes, how people commute to work, and types of houses in a particular area, which may assist your search in buying property in Melbourne.

Borrowing money

When buying a house in Melbourne, it is almost always required to set up a home loan through your bank or borrow money from a variety of different financial institutions. You will require a deposit which is generally 10% of the total price of the property and will be paid once the seller has accepted the offer. Settlement can happen anywhere between 30 to 120 days, and this is agreed with the buyer and seller. Be wary of the additional costs when buying a house; stamp duty, loan application, land title transfer free, council rates, legal and conveyancing costs and any repairs, and the cost of moving. If you are to become a permanent Australian resident over time, you are eligible for a First Home Owner's Grant which will allow you to cut costs off the stamp duty.

Tips to remember

Always research as much as you can before buying a property in Melbourne to enhance capital growth. Look at desired neighbourhoods but it can still be beneficial to look at surrounding suburbs and the further away from the city centre you go, the lower house prices will be. Establish a budget and check out inspections within that budget to see what it can get you. With interest rates changing it is always good to stick within your budget so you don't overextend.

We do our best to provide accurate and up to date information. However, if you have noticed any inaccuracies in this article, please let us know in the comments section below.