A home can be a very important part of settling into a new country and whether you decide to rent or buy, you need to consider all the options that are available to you. In either case, you will need to understand a range of Australian laws and practices, which may vary significantly from those in other countries. Importantly, the laws governing real estate also vary between each state and territory.
Information on state or territory specific legislation for renters and buyers is available from the Real Estate Institute in each state or territory. Relevant contact details for state and territory Real Estate Institutes can be found on the left hand side of this page.
Information is also available from state and territory consumer affairs authorities. See http://www.accc.gov.au/content/index.phtml/itemId/8627 for contact details.
In making your decision about your new home, you will need to consider:
What you can afford
If you are buying: calculate the deposit and repayments you can afford. Deposit requirements will vary, but as a rule of thumb, at least ten per cent of the selling price will be required.
In general, lenders usually base the amount they will lend you on the rule that monthly repayments do not exceed a quarter of gross (pre-tax) income. You will also need to take into consideration additional costs related to buying, such as property taxes, legal costs and insurance.
Information on state and territory property taxes can be found at the Treasury or Revenue Office in each state or territory. You may also need advice on tax obligations – information is available from the Australian Taxation Office (www.ato.gov.au).
If you are renting: you may be required to pay a deposit to secure the property. In some circumstances, if you change your mind, you may forfeit this deposit. You may also be required to pay rent in advance and a security deposit of between four to six weeks’ rent, this is known as rental bond. Prior to moving into the property, ensure that you discuss with your agent all the costs you are required to pay and when they must be paid by.
Where you want to live
Identify the areas or communities that suit your lifestyle. Assess your need for transport, schools, hospitals, sports facilities and shops. Take the time to get to know the area in which you plan to live. Remember, you can also ask your local real estate agent to assist you in selecting an area that would be suitable for you.
The type of house that will suit your needs
Decide if you are looking for a flat, apartment, townhouse or house. Factors to consider include how many bedrooms and bathrooms you need, if you need formal and informal living areas, the size of the kitchen, if you require a low maintenance garden, the size of the garage and if you need a home that is pet friendly.
Finding a place
The most common way of sourcing suitable properties, either for rental or purchase is through newspapers, real estate websites and real estate agency shopfront advertising.
Inspecting a property
Inspections should be made at the advertised time or by appointment with the real estate agent. If you are purchasing, you may consider having the property inspected by a builder or architect to assess whether there are any defects that might affect your decision to buy.
Buying a property
When buying a property it is vital that you organise your finances before making an offer on a property or bidding at an auction. Make arrangements to cover the deposit should your offer or bid be successful, and arrange to have the appropriate mortgage funds available for settlement*.
Confirm the amount you are able to borrow and calculate your capacity to repay your loan, without negatively impacting on your lifestyle or other financial commitments. Don’t forget that a variable interest rate can move up and down, and you need to have a bit of leeway to cope if this happens.
To learn more about the buying a property in your state or territory you can visit the REIA’s website at www.reia.com.au and click on Consumers or contact your local real estate agent.
Currently, the median house prices in each state and territory in Australia are:**
Renting a property
When renting a property, you will be required to sign a tenancy agreement which is legally binding. Take the time to read the document carefully and understand all the conditions of the agreement, including rent payment requirements, before you sign. You will also need to check and sign a condition report which documents the condition of the property. If you would like assistance in understanding any documents you need to sign, it would be a good idea to contact a solicitor.
Your right as a tenant is to live in a safe and habitable property. You also have a responsibility to main the property. Problems should be reported in writing to your real estate agent.
It is generally a requirement for the real estate agent to inspect the rental property to ensure that the property is being cared for property. This will be specified in your rental agreement.
Any rental increases must be in accordance with the contract and legislative requirements, and must be advised in writing.
It is your responsibility as a tenant to insure your own belongings and furniture. The owner’s insurance does not cover your belongings.
If you wish to terminate your tenancy, it must be done in accordance with legislative requirements and the process set out in the tenancy agreement. You should always submit your notice in writing.
For further information, please visit the REIA’s website at www. reia.com.au.
*Settlement is the final stage of the sale when the purchaser completes the payment of the contract price to the seller and takes legal possession of the property.
**This information represents the latest data recorded at the end of the March quarter 2009.