The Australian government takes proactive steps to insure that the majority of homes sold are for permanent dwellings rather than investment properties that may remain empty. In fact, investors are unable to purchase an established home purely for investment purposes. This rule has caused a surge in the new construction market, with homebuilders creating a variety of home designs that cater to the needs of homebuyers looking for a new home and overseas investors. While new homes are beautiful and offer the benefit of never having been lived in, there are pros and cons to purchasing new construction.
Pros of Buying a New Home in Australia
If you’re an overseas investor, one of the best things about buying new construction is that you can purchase it as an investment without the intention to use it as a permanent dwelling. This means you can rent it out after purchase and make a return on your investment until you’re ready to live in the home.
Homebuilders in Australia also offer great promotions and packages to homebuyers. Since most homebuilders offer their properties by lot, you can usually find a good package deal on the lot and the home if purchased together at the same time. While some places allow you to purchase a lot for a future dwelling, if you contract to have the house built after purchasing the lot you can save money. Most builders also offer upgrades on countertops or flooring when buying new construction. You can go from laminate to granite simply by taking advantage of an upgrade offer. You may also be able to get the wood on your patio or house treated for free by purchasing new construction.
Cons of Buying a New Home in Australia
If you are not a resident of Australia and are thinking about relocating to Australia, you will need prior approval before purchasing a new home. The Foreign Investment Review Board regulates who can purchase homes as investments or dwellings when the buyer is not a resident of Australia. This process can take time, and if you’re denied you may need to look elsewhere for an investment property. However, most buyers are approved or are able to work with their realtor on exempting themselves from the approval process.
Once you get approval, you will need to purchase the home in advance. This means it will be difficult to change your mind should you find a better location or homebuilder that you want to work with. Although there are regulations in place to sustain the population of Australia, investors can still buy new homes and build wealth with Australian properties. Consider working with a skilled Australian real estate agent, regardless of the type of Australian home you’re buying.