Beautiful environment, strong economy, low unemployment, excellent education – who wouldn’t want to own a little piece of Australia? With our migration numbers soaring, experts agree that new Australians are becoming big players in the property market.
The 2008-09 Australian Immigration Update reported 224,610 permanent additions (persons either new to Australia or already on a temporary visa) – up 9.1 per cent from the previous reporting year. Additional to these figures are new temporary residents including student visa holders. The UK was the single largest birthplace group of new additions (14.2 per cent), followed by New Zealand (11.4 per cent) and India (11.2 per cent).
“To put it in perspective, the 2009 levels were almost twice as high as the previous peak levels,” says Angie Zigomanis, Senior Analyst at BIS Shrapnel. “So we’re talking fairly large numbers from overseas migration.”
Zigomanis explains that the focus is on skilled migration and overseas students, who often start out as renters, so the impact on the property market is not instantaneous. “Further down the track, particularly as long term overseas visitors move to permanent residency, once they put together a deposit they’ll eventually move into owner-occupation. It’s a more immediate effect in the rental market but in terms of them going out to buy as first home buyers it may take a little longer.”
But migration levels have been high for some time, increasing the demand for what is a very low housing supply. And the new arrivals among us are on the property hunt, according to Mike Green, Managing Director of Harcourts International Estate Agents. “Probably over the last three to six months there’s certainly been an increase but prior to that… the global economic situation stopped a lot of the major corporations transferring people around.”
Recent changes to government policy have helped to entice buyers. Since March 2009, temporary residents no longer have to apply to the Foreign Investment Review Board (FIRB) before purchasing property for their principal place of residence (i.e. not for investment purposes). Rich Harvey, CEO of propertybuyer.com.au adds, “They used to have a restriction on the number of dwellings that could be sold to overseas investors and also there was a $300,000 limit on properties for students. Those have been lifted. [The changes] make it easier for foreigners and migrants to buy property.” Foreign investors who are not residents must apply to the FIRB and can only buy new properties.
Harvey says that his business, which sources properties for buyers, is seeing increased activity from migrants in all price brackets, with a lot of interest from China and other Asian countries.
But while our real estate is still expensive in global terms, for many people the benefits of buying here – our economy, jobs, education and lifestyle – outweigh the costs. For those people, there are processes and systems that are unique to the local market that will need navigating.
“The first thing that anyone buying in a new country would have to do is understand what the legal situation is, what the process is in actually buying a property and just the practical steps,” says Green. He says local variances such as the importance of property pest inspections may come as a surprise to some.
“You’ve got to learn the local rules,” says Harvey, who helps his clients understand all the steps in the process from negotiating the purchase price to contract exchange and the cooling-off period.
When selecting a property to buy, migrants need to consider what type of lifestyle, culture and environment will suit them, then make a shortlist of well-researched areas. “They need to look at what their links are in terms of transport connections to and from work,” says Harvey. “[They] need to think about where they’re going to send their kids to school. The third thing is being in the right environment for their demographic.”
