UK vs Australian Property Market
If you’re a UK resident hoping to purchase Australian property, or an Australian national considering investing in a UK home, there are a number of things you’ll need to know before you make a start.
You’ll likely find that the regulations and processes involved differ considerably and that without proper research, things can get a little confusing.
Mistakes can be costly, which is why the specialists at Property Solvers – experts in selling homes quickly – have put together this helpful article to guide you.
So, what are some of the differences between purchasing property in the UK as opposed to Australia?
1. The property market
Australia has seen significant property market growth over the last decade, with some cities – such as Melbourne and Sydney – experiencing increases in property prices of between 90 and 105% since 2009.
While prices in these major urban centres are now slowly beginning to settle, they are continuing to rise in places such as Hobart, Canberra and Perth – so it’s a great time to invest there if you want to make a significant profit.
The UK, on the other hand, is experiencing something of a recovery following the political uncertainty surrounding Brexit. Since the vote to leave the European Union in 2016, the property industry has been very sluggish.
However, following the significant general election in December of 2019, transactions have been picking up considerably, so it’s worth getting on the ladder there as soon as you can in case of a boom.
2. Residency status
It’s no secret that Australia is strict when it comes to visa and residency legislation. However, it is possible to purchase property – with or without the support of a mortgage or loan – as a non-resident of Australia.
To do this, you must first seek approval from the Foreign Investment Review Board or FIRB. If you intend to live in the home you are purchasing as your primary residence, you can invest in an existing property.
If you are purchasing a holiday home or investing in properties to sell on or let out, they must be new builds.
It is perhaps slightly easier for non-residents to buy property in the UK, but that may be subject to change depending on the outcome of their departure from the European Union.
In the meantime, though, it’s worth noting that it is very difficult to get a mortgage if you are not a UK citizen, so having the money up front is highly beneficial if possible.
The steps you’ll need to take in order to secure a purchase in the UK and in Australia are somewhat different. We’ll compare them below.
You’ll need to either have the funds readily available or achieve pre-approval for your mortgage in whichever country you have chosen. As we’ve mentioned before, this point differs rather considerably between the territories.
Independent search or realtor
Like America, Australia generally requires buyers to hire a realtor or real estate agent to help in both the property search and the subsequent purchase process. However, would-be homeowners in Australia can take a look for themselves too.
In the UK, house hunters must seek out properties independently – either online or by visiting an estate agent. Once they’ve found the right property, they can make an offer through the relevant estate agent who will communicate with the seller on their behalf
Both processes require the buyers to engage a solicitor, who will communicate with the seller’s legal advisor on their behalf. They will often organise various surveys and checks too.
It’s pretty common in Australia to arrange these surveys to take place before an offer is made, while in the UK they are regularly undertaken after this stage – though it’s understood that the offer will be subject to the results of the checks.
Making an offer
The “type” of offer you can make also varies between Australia and the UK. Generally, UK buyers make a verbal offer that is then accepted or rejected by the seller.
It is possible for the buyer to offer an amount that is lower than the original asking price and the seller may accept if they don’t expect to get a better bid. They may also reject it if they consider the price too low – at which point the buyer can counter with a better offer.
The buyer may also make a higher offer than the original asking price from the start if they are aware that there is considerable competition for the property.
In Australia, this is also the case – but there are a few ways in which you can make the offer.
In the first instance, you can purchase a property via private treaty or sale – either directly from the seller or via their real estate agent.
However, it’s also common for your solicitor to put together a sales summary, with details of the property, its location, the asking price, your offer and the deposit you will be putting down. You will then need to wait for this to be accepted.
If you are paying in full, you’ll need to put down a deposit upon the acceptance of your offer – usually of around 10% of the asking price of your property.
4. Seasons, time zones and communication
It’s important to note that the seasons in the UK and Australia are polar opposites due to the position of both countries.
The UK, which is in the earth’s northern hemisphere, experiences spring throughout March, April and May, summer in June, July and August, autumn in September, October and November and winter in December, January and February.
Australia, in the southern hemisphere, experiences spring in September, October and November, summer in December, January and February, autumn in March, April and May and winter in June, July and August. Annual celebrations like Christmas remain the same.
Australia is also 11 hours ahead of the UK in terms of timezones.
These matters should be taken into account when communicating with service providers or arranging construction work and repairs.
For further information about buying UK property – including taxation and the details of local councils through whom you may discuss matters such as planning permission, you can explore gov.uk, the UK government website.
For details of buying in Australia, visit Australia.gov.au.