Buying property in any part of Australia is definitely a solid long-term investment in spite of a volatile market that results in an extreme swing in prices in the short term. It is interesting to note that the demand for property outstrips supply as most of the population is found settling in a rather small part of Australia. The market volatility is closely linked to the commodity price driven economy and as the economy looks up, it should get easier to control the property market especially in cities like Melbourne and Sydney. The supply of housing falls short by more than 40000 annually

If you are a first home buyer, you can avail the government’s First Home Owner Grant of $7000 which will be paid to you directly for purchase of property costing less than $750,000. A few states even offer additional incentives. This grant can be availed only for purchase of a house and not land. Pest Inspection, and Strate Inspection and Surveys are prerequisites for completing a sale agreement.

Even with all these encouraging measures in place, 29% of the population is still living in rented houses and just 15% of the population form first home buyers. Real Estate Experts advise buying a property only if you plan to remain in Australia for more than three years or if you are a permanent resident. A two storey home in the suburbs costs between $150,000 to $375,000 and a single storey home ranges from $110,000 to $185,000. An upswing in the Melbourne Property Market is predicted for March/April 2010. Melbourne’s population is poised to rise by eight million by the year 2050.

The government brings out several booklets and articles to guide new home buyers and you should check them out to gain a better understanding of the nuances of buying property prior to actually venture forth. You can also find information relating to Real Estate in the Saturday edition of prominent newspapers.

It is quite easy to get a loan to buy a home if you are a salaried employee but can be a long drawn out process if you are self-employed. Couples can quite easily get housing loans upto five times their joint pre-tax income and only need to prove that they have been working in the same concern for a few months.

Most loans do not cover the stamp duty and other costs like Solicitor Fees ($1500 to $1700), Legal Fees (between 1 and 2% of purchase price), Land Transfer Registration (0.5% of purchase price), Government Taxes (different rates for different states), etc.

Stamp duty is charged upwards of 2% depending on the price of the property. In Western Australia, there is no stamp duty for property priced at less than $500,000. In Melbourne, stamp duty ranges from $8,870 for a property valued at $250,000 to $37,070 for a $700,000 house.

Real Estate Agencies charge a standard fee of 5% to vendors for the first $18,000 and 0.25% thereafter. The agency fee varies for different states for buyers. It is not advisable for you to use the same agent who also represents the vendor. If you are very disciplined about your finances and have a clear idea about your budget and limitations, then buying property at auctions is a very good idea. Buying at an auction is very advantageous as you can close the deal very fast. However, the biggest drawback is that you will not have sufficient time to inspect the property properly and you will also need to keep your finances ready as any delay in settlement could lead to legal proceedings against you.

Several types of home loans are available for people from different professions and income groups. You will need to provide proof of identification, income-proof, and details of all assets and liabilities to the Lender to find out your loan eligibility. You then need to add the incidental expenses relating to stamp duty, etc, and only when you are fully prepared, you should even think of looking for property.

The process of buying a home is much easier now and if you know how to prepare financially, you can be the owner of a brand new home in less than 3 months. Never be in a rush. Take your time in selecting and checking out the property and you will see that you just might end up buying the house of your dreams for much less than expected.

This article is contributed by Real Estate Echuca, andDeniliquin Real Estate.

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Filed under: Personal Finance

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