Real Estate in Australia

Yes, foreigners can buy property in Australia, but only under certain conditions. The most important of these is the need for foreign investors (non-resident) and temporary residents to get permission from the Foreign Investment Review Board (FIRB) before purchasing a property

Stability is the first factor to look at because it safeguards against market fluctuations and economic uncertainties, making it vital for real estate investment decisions. It is an information you need as a foreigner buying a property in Australia.

You probably already know that Australia is incredibly stable. The last Fragile State Index reported for this country is 19.6, which extremely high.

Australia’s stability is largely attributed to its robust democratic institutions and strong rule of law, which ensure effective governance and the protection of individual rights. Additionally, its diverse and resilient economy, bolstered by abundant natural resources and strategic trade relationships, provides a solid foundation for sustained economic growth and social stability.

Investors can definitely rely on the country’s stability for investment. Let’s review the economic outlook.

While Australia is known for its stability and steady economic growth, 2025 might not be the ideal time to buy property there. The country’s economy is projected to grow by 9.1% over the next five years, which translates to an average GDP growth rate of 1.8%. This moderate growth rate suggests a stable property market, which is generally good news for investors. However, it also means that property prices are likely to continue rising steadily, making it more expensive to buy in the future.

Another factor to consider is the decrease in building permits being issued in Australia. With fewer new properties being built, the supply of available homes is likely to become more limited. This reduced supply, combined with a growing population, could drive property prices even higher. As demand outpaces supply, potential buyers might find themselves facing increased competition and higher costs.

Australia’s population is not only growing but also becoming slightly wealthier. This increase in wealth can lead to more people entering the property market, further driving up demand and prices. While this might be beneficial for those who already own property, it poses a challenge for new buyers who may find it difficult to enter the market at a reasonable price point.

Lastly, while rental properties in Australia offer gross rental yields ranging from 2.8% to 5.5%, these returns might not be as attractive when considering the rising property prices and the minimal inflation expected in the country. With inflation remaining low, the real value of rental income might not increase significantly over time, potentially limiting the financial benefits of property investment. All these factors combined suggest that 2025 might not be the most opportune time to buy property in Australia.

Buying off-the-plan property is becoming an increasingly popular option for property buyers in Australia. It involves purchasing a property before it is built or completed, based on a plan or artist’s impression. While this approach can come with some risks, it also has numerous benefits. In this article, we will outline 10 benefits of buying off-the-plan property in Australia.

1. Lower deposit

One of the biggest benefits of buying off-the-plan property is that it typically requires a lower deposit than buying an established property. This can make it easier for buyers to enter the property market and secure a property.

2. Customization

Buyers can often customize the property to suit their preferences, such as selecting specific finishes and fittings.

3. Stamp duty savings

In some cases, buyers of off-the-plan property may be eligible for stamp duty concessions or exemptions.

4. Guaranteed price

When purchasing off the plan, buyers can often secure the property at a guaranteed price, protecting them from any price increases that may occur during the construction process.

5. First home buyer incentives

First home buyers may be eligible for additional incentives when purchasing off-the-plan property, such as government grants or concessions.

6. Energy efficiency

New properties are often designed with energy efficiency in mind, which can result in lower utility bills and a smaller environmental footprint.

7. Attractive payment plans

Developers may offer attractive payment plans for off-the-plan purchases, allowing buyers to stagger payments over the construction period.

8. Potential rental income

Buying off the plan property can provide the opportunity for rental income from the property once it is completed, providing a source of passive income.

9. Reduced maintenance

As the property is new, it is likely to have lower maintenance costs in the early years of ownership.

10. Potential capital growth

Buying off the plan property can provide significant potential for capital growth, as the property is likely to appreciate in value before it is even built.

If you’re thinking of investing in property in a country, it’s helpful to take into account the quantity of construction permits granted. More building permits being delivered implies a rising demand for properties and a thriving market.

Unfortunately, the number of building permits issued is decreasing in Australia.

Over the past year, according to Australian Bureau of Statistics, the number of building permits delivered by the Australian municipalities fell by 9.4%, from 212,905 to 192,956 units.

This is definitely a red flag. Let’s consider more data to get a better understanding.

One last thing to note though. Less building permits means less real estate supply. If it’s the case, then property prices will increase in Australia in 2025.

It displays the percentage of income you can generate by renting out the property, giving you an idea of its investment value.

According to Numbeo, rental properties in Australia offer gross rental yields ranging from 2.8% and 5.5%. You can find a more detailed analysis (by property and areas) in our pack of documents related to the real estate market in Australia.

It means that the income potential from a real estate investment is relatively moderate.

As we mentioned before, the amount of available real estate will stay the same (and housing prices may be stable), but more wealthy people will be looking to rent properties. Then we can conclude that rental yields might increase in Australia in 2025.

To buy property in Australia as a foreigner, you must first obtain approval from the Foreign Investment Review Board (FIRB) and understand the specific rules and regulations related to foreign investment, which vary based on your residency status and the type of property.
Here’s a breakdown of the process:
1. Understanding the Rules and Regulations:
Foreign Investment Review Board (FIRB) Approval:
As a non-resident, you need to seek FIRB approval before acquiring any interest in Australian residential property.
Residency Status:
While there isn’t a specific residency requirement, your residency status can affect the type of property you can buy and the approval process, according to propertytaxspecialists.com.au.
Meaning of an Interest:
Under FIRB rules, an interest includes signing an unconditional contract to purchase a dwelling or a share in a dwelling,
2. FIRB Application Process:
Submit Application: You need to submit detailed information about the proposed property purchase to the FIRB along with the application fee.
Fee: The application fee escalates with the property price,
FIRB Assessment: The FIRB assesses applications to ensure that foreign purchases of Australian property align with national interests and contribute positively to the community.
3. Buying the Property (Once Approved):
Property Search: Find a property that suits your needs.
Make an Offer: Negotiate to buy your chosen property.
Loan: Securing a loan, if needed, is an important step in purchasing a property
Due Diligence: Conduct thorough inspections and legal checks on the property
Settle the Purchase: Complete the final steps of the purchase, including settling on the property.