Australian real estate is one of the most attractive investment propositions
around for overseas investors. There are two reasons. First, we have a
strong economy that gained major international attention during and after
the GFC, so we're now very well known in global investment circles. Second,
we have an exceptional track record for capital growth and rental returns
over the long term. Today, we see a lot of demand from overseas buyers, particularly Chinese
families whose children are coming to Australia to study. Under Foreign
Investment Review Board (FIRB) rules, their child is allowed to buy and live
in one established property while they're here. So mum and dad are funding
the purchase both as an investment and to put a roof over their child's
head. Families who can afford larger homes are seeing opportunity in today's
softer prestige market too. This is likely to be a growing trend given our impressive education system.
We're actually the third largest provider of international education behind
the US and UK, with one in five of our university students coming from
overseas (about 20 per cent from China), according to the Bureau of
Statistics. Rules around foreign property ownership can be tricky to understand and
there have been some major changes over the past few years. Let me re-cap
what's been going on. Generally speaking, the FIRB prohibits foreign ownership of established real
estate for investment but allows it for brand new or off-the-plan properties
because this promotes the expansion of housing stock, which we desperately
need. In December 2008, the Government decided to relax the foreign ownership
rules. For a period of about 18 months, until the rules changed again,
overseas students could buy any type of property to live in without seeking
FIRB approval. They could also hold the property for investment as long as
they liked, even if they left the country. The Government also removed the restriction preventing students from buying
property worth more than $300,000 while living here. This meant rich
overseas families could purchase a multi-million dollar home for their child
to live in and keep it for investment as long as they liked. The same rules
applied to businesspeople working in Australia on temporary visas - and
there's plenty of them too! Concerns soon arose about the number of overseas buyers purchasing local
property, as well as the number of properties they were purchasing, and what
this extra demand was doing to prices. Another concern was reports that
foreign owners were holding properties and not renting them out, thereby
reducing available rental stock for Australians during a significant ongoing
shortage. So in 2010, the Government tightened the rules again. They re-imposed the
requirement of notification and approval before a temporary resident could
buy property and introduced a new rule that they must commit to selling as
soon as they leave the country or face strong new penalties. These rules appear not to have dampened the enthusiasm of overseas buyers.
If you have a child coming here to study a six-year or more medical degree,
that's plenty of time to make a healthy gain on your investment before
selling - that is, if your child decides not to stay in Australia after
graduation. You see, many students and professionals who come here on temporary visas
decide to stay (why wouldn't they? Australia is the best country in the
world to live in!), and once they're on a permanent resident visa, they can
buy as many homes as they like - using their own money or that of their
overseas families. Here's an update on the most important FIRB rules. If you want to read more,
go to http://www.firb.gov.au/content/real_estate/real_estate.asp Foreign non-residents are not allowed to buy established dwellings for
investment.
They can, however, purchase new properties (either newly-built or
off-the-plan) or vacant land to build on as this promotes the expansion of
housing stock (some conditions apply).
Temporary residents can purchase one established dwelling to use as their
residence but they must apply for FIRB permission and they must sell it as
soon as they leave the country.
Foreign companies can buy established homes for Australian-based staff as
long as they agree to sell or rent out the property if they expect it to be
vacant for six months or more.
Foreigners living in Australia on a permanent resident visa do not need
approval to buy for owner-occupation or investment.
In addition to education and a strong property market, Australia also has
enormous appeal with international buyers due to our enviable lifestyle,
safety, our strong economy and currency and the astounding natural beauty of
our landscape. Published: Wednesday, February 22, 2012 Best regards
Linda J. Debello
L J Gilland Real Estate Pty Ltd
PO Box 19, Zillmere 4034.
Office:- 07 3263 6085
Mobile:- 0409995578 Confidential Email:- The information in this message is intended for the
recipient named on this email. If you are not that recipient, please do not
read, copy, distribute or act upon the message as the information it
contains may be priveleged. If you have received this message in error,
please notify us immediately by return email. Thank you for your
co-operation.
around for overseas investors. There are two reasons. First, we have a
strong economy that gained major international attention during and after
the GFC, so we're now very well known in global investment circles. Second,
we have an exceptional track record for capital growth and rental returns
over the long term. Today, we see a lot of demand from overseas buyers, particularly Chinese
families whose children are coming to Australia to study. Under Foreign
Investment Review Board (FIRB) rules, their child is allowed to buy and live
in one established property while they're here. So mum and dad are funding
the purchase both as an investment and to put a roof over their child's
head. Families who can afford larger homes are seeing opportunity in today's
softer prestige market too. This is likely to be a growing trend given our impressive education system.
We're actually the third largest provider of international education behind
the US and UK, with one in five of our university students coming from
overseas (about 20 per cent from China), according to the Bureau of
Statistics. Rules around foreign property ownership can be tricky to understand and
there have been some major changes over the past few years. Let me re-cap
what's been going on. Generally speaking, the FIRB prohibits foreign ownership of established real
estate for investment but allows it for brand new or off-the-plan properties
because this promotes the expansion of housing stock, which we desperately
need. In December 2008, the Government decided to relax the foreign ownership
rules. For a period of about 18 months, until the rules changed again,
overseas students could buy any type of property to live in without seeking
FIRB approval. They could also hold the property for investment as long as
they liked, even if they left the country. The Government also removed the restriction preventing students from buying
property worth more than $300,000 while living here. This meant rich
overseas families could purchase a multi-million dollar home for their child
to live in and keep it for investment as long as they liked. The same rules
applied to businesspeople working in Australia on temporary visas - and
there's plenty of them too! Concerns soon arose about the number of overseas buyers purchasing local
property, as well as the number of properties they were purchasing, and what
this extra demand was doing to prices. Another concern was reports that
foreign owners were holding properties and not renting them out, thereby
reducing available rental stock for Australians during a significant ongoing
shortage. So in 2010, the Government tightened the rules again. They re-imposed the
requirement of notification and approval before a temporary resident could
buy property and introduced a new rule that they must commit to selling as
soon as they leave the country or face strong new penalties. These rules appear not to have dampened the enthusiasm of overseas buyers.
If you have a child coming here to study a six-year or more medical degree,
that's plenty of time to make a healthy gain on your investment before
selling - that is, if your child decides not to stay in Australia after
graduation. You see, many students and professionals who come here on temporary visas
decide to stay (why wouldn't they? Australia is the best country in the
world to live in!), and once they're on a permanent resident visa, they can
buy as many homes as they like - using their own money or that of their
overseas families. Here's an update on the most important FIRB rules. If you want to read more,
go to http://www.firb.gov.au/content/real_estate/real_estate.asp Foreign non-residents are not allowed to buy established dwellings for
investment.
They can, however, purchase new properties (either newly-built or
off-the-plan) or vacant land to build on as this promotes the expansion of
housing stock (some conditions apply).
Temporary residents can purchase one established dwelling to use as their
residence but they must apply for FIRB permission and they must sell it as
soon as they leave the country.
Foreign companies can buy established homes for Australian-based staff as
long as they agree to sell or rent out the property if they expect it to be
vacant for six months or more.
Foreigners living in Australia on a permanent resident visa do not need
approval to buy for owner-occupation or investment.
In addition to education and a strong property market, Australia also has
enormous appeal with international buyers due to our enviable lifestyle,
safety, our strong economy and currency and the astounding natural beauty of
our landscape. Published: Wednesday, February 22, 2012 Best regards
Linda J. Debello
L J Gilland Real Estate Pty Ltd
PO Box 19, Zillmere 4034.
Office:- 07 3263 6085
Mobile:- 0409995578 Confidential Email:- The information in this message is intended for the
recipient named on this email. If you are not that recipient, please do not
read, copy, distribute or act upon the message as the information it
contains may be priveleged. If you have received this message in error,
please notify us immediately by return email. Thank you for your
co-operation.
No comments:
Post a Comment