Can Singapore Citizens Buy Property in Australia?


The simple answer is YES. Singaporean citizens can buy property in Australia however the following points must be considered before you are ready to enter the Australian property market.

Why should you buy in Australia as a Singaporean?

The Australian property market has a lot to offer Singaporean investors. As an english-speaking city close to home, many Singaporeans have an affinity with the Australian lifestyle, having either studied, worked or visited the country. A Singaporean citizen may consider investing in Australian property for several reasons, such as:

  • Lifestyle considerations
  • Steady growth & rental yield
  • Availability of Insurance
  • Via the Australian Prudential Regulation Authority (APRA), Australia has responsible lending legislation and prudent economic management, this reduces the risk of asset price bubbles
  • Australia has never had prices fall more than 20% in one year

Be prepared to front the cash on Newly Built Properties when buying in Australia

The Australian foreign investment laws dictate that non-residents can only buy newly built properties, with approval from the Foreign Investment Review Board. Many Australians, especially first-home buyers, buy established homes rather than new properties, making their average purchase price between A$500-$600K (2020) which is far below the prices of properties marketed to Singaporeans.

Foreign investors snapping up new developments benefits the Australian construction sector and as there is limited competition for those high-end properties, local buyers aren’t overly fussed with international buyer interest.

Here is our Step by Step Guide to Buying Property in Australia as a Citizen of Singapore

Step 1. Organize or hire your team of professionals that includes
  • Conveyancer/Solicitor → to take care of all the legal work for you
  • Mortgage broker → ideally with experience working with non-resident buyers. We recommend BC Invest.
  • Accountant (if required) → to assist you with structuring your financials and saving on tax as they are the experts
  • Buyers agent (if required) → to source the listings and negotiate the price on your behalf, this is also where Home Live comes in!
Step 2. Get your loan pre-approved

With great properties on the Australian market being snapped up so quickly, having a loan pre-approved will ensure you’re in with the best chance. Loan pre-approval will also determine that you are eligible for a loan and how much you can borrow.

Step 3. Applying for a mortgage

Many banks in Australia have begun tightening their lending criteria for all home loans, specifying ‘Interest only’ loans for ‘Owner-occupied’ units in order to decrease the risk of default as there is genuine demand for the houses being occupied. However, Australian banks and lenders tend to favour Singaporean investors due to the strength of the Singaporean Dollar (SDG) and the stability of the SNG economy.

While Australia has started to tighten its lending, Singapore banks are still selectively lending to Australian property purchases for Singaporeans or permanent residents who are tax residents in Singapore.

Step 4. Confirm you qualify with the Foreign Investment Review Board (FIRB)

Prior to the purchase, you must be able to secure approval from the Foreign Investment Review Board (FIRB), which is responsible for ensuring that foreign investments are beneficial to Australia’s economy. This explains the logic behind forcing foreigners to purchase new dwellings, as this adds to the current housing stock.

Step 5. Find a suitable property you wish to buy (Home.com.au)

Non-residents or foreigners including Singaporeans – cannot buy established dwellings in Australia. There are strict rules about what types of residential investment property foreigners can purchase in Australia, which is limited to:

  1. Under-construction or new buildings;
  2. Vacant land for construction, if construction begins within 24 months; and
  3. Established dwellings to be demolished and replaced with a greater number of dwellings
Step 6. Negotiate the purchase price

Many buyers prefer to make use of a professional for this, for example a good buyer’s agent.

Step 7. Obtain formal mortgage approval

You cannot commit yourself to buying a property until your mortgage has been formally approved. Send your mortgage broker your contract of sale when you’ve found a property to buy to start the formal approval process.

Step 8. Exchange contracts and pay your deposit

Once your mortgage is approved and your solicitor/conveyancer has given you the go-ahead you can sign your contract. Normally, Australian property purchases require a 10% deposit to be paid upfront however this amount varies depending on states and can also be negotiated.

Step 9. Seek FIRB approval

So, if you find any property you wish to purchase:

(1) You have to apply to FIRB

(2) You will need to fill in a foreign investment application form from the Australian Tax Office (ATO) website.

Application fees start from $5,800 for properties worth $1 million or less, and the fees increase as the property price bracket increases. The approval process from FIRB may take a minimum of 30 days.

Foreigners who reside in Australia (such as international students or those working in Australia) are considered resident buyers and allowed to purchase existing properties on the market. They need not seek FIRB’s approval. However, they are subject to other restrictions when selling the property when they leave Australia. 

Ensure you check the various state requirements if you belong to this category of foreign buyers, and ensure you can get the following documents:

  • IDs (Passport and an additional ID required by the bank)
  • Payslips
  • Notice of Assessment
  • Between 3 to 6 months worth of bank statements
  • Employment letter or contract
  • 3 to 6 months statement of debt and liabilities
  • Singapore credit file

For Self-employed Singaporean citizens below mentioned documents will be required-

  • A minimum of 2 to 3 years of trading history.
  • A minimum of 2 years of income tax and company financials.
  • At least 6 to 12 months of bank statements for the company and the individual.
  • If you have a stable employment history and income, a strong asset position and have saved up a large deposit, then it increases your chances of loan approval.
Step 10. Final arrangements

If you are living overseas you may need to visit the Australian embassy or consulate to get identified or to have your loan contract witnessed. If you have a trusted friend or relative living in Australia then you can appoint them as a Power of Attorney (POA) and they can sign the loan contract for you.

Settlement (when the property actually changes hands and your loan is advanced – this will be handled by your Conveyancer/Solicitor in conjunction with your bank and mortgage broker so you don’t need to be there for this to happen. And you are good to go!

Welcome to the wild Australian property market!

Team Home

Have any questions, ideas or feedback? Let us know at support@home.com.au

Can New Zealand Citizens Buy Property in Australia?


The simple answer is YES. It is super straightforward to buy property as a New Zealand citizen given almost all Australian qualifications translate to Kiwis. All you need to do is some thorough research. 

Why are Kiwi’s interested in buying property in Australia?

The New Zealand lifestyle has a lot in common with the Australian way of life, making the move ‘across the ditch’ more realistic and appealing for Kiwis. New Zealand citizens living in Australia are considered permanent residents and are therefore offered all the same benefits and liberties as any other Australian; this includes acquiring a mortgage at the same rate and even being eligible for the First Home Owners Grant.

Dissimilar to other foreign property buyers, New Zealand citizens are able to purchase new properties as well as existing, established, vacant land and previously owned properties, just like any Australian can. Further to this, Kiwi’s looking at buying a standard residential property do not need Foreign Investment Review Board (FIRB) approval.

green trees near body of water
Iconic view from the Sydney suburb of Kirribilli

If you are looking to purchase a property as a New Zealand citizen, we recommend considering the following points:

For Kiwi’s currently living in Australia…

As a New Zealand citizen you are allowed to live and work in Australia permanently, and the same goes for buying a house in Australia. Your loan can be used for any kind of residential housing – this includes both a home to live in and an investment property in Australia. 

If you’re not currently living in Australia…

The same rules apply to Kiwi’s looking to buy in Australia that are still living in New Zealand, however, mortgage terms might be slightly different based on your lender and you will need to review your Stamp Duty costs based on which state or territory you are looking purchase in – see ‘Stamp Duty considerations’ for more information below.

Stamp Duty considerations for Kiwi’s

Stamp duty is a tax on a property transaction that is charged by each state and territory and goes straight to the state government – each state in Australia imposes a different stamp duty regime (except the Northern Territory) so these costs can vary state to state. The stamp duty rate will depend on factors such as the value of the property, if it is your primary residence and your residency status.

When citizens from New Zealand arrive in Australia they are allowed a Special Category Visa which means you will be exempt from having to pay stamp duty surcharge which is normally required for NSW, VIC, QLD, WA, SA, the ACT and TAS.

However, it’s important to note that in New South Wales you’ll need to be in the country for at least 200 days to avoid this fee. You’re also required to be in the country at the time of settlement and contract signing in order to be eligible to avoid the stamp duty charge. The only state that you can remain outside of Australia at the time of settlement is in the Northern Territory.

Welcome to the wild Australian property market!

Team Home

Have any questions, ideas or feedback? Let us know at support@home.com.au

Live-streaming, purpose built for Real Estate

The internet continues to transform both social and business interactions across all industries, particularly over the last decade where high bandwidth connections are now the norm. Remote communication tools such as video conferencing were already largely ubiquitous, whether for remote presentations, hybrid workplaces or even your regular catch up with extended family.

Fast-forward to 2020 where we’ve been faced with extreme isolation and social-distancing measures due to the COVID-19 Pandemic – these tools are no longer a nice-to-have but a necessity for anyone looking to maintain a sense of normalcy or continue functioning as a business; keep in mind also that Australia has fared much better than most other countries.

With these platforms becoming so accessible and plentiful, it can be confusing when selecting the correct tool for your specific needs. As each live streaming tool has been built to offer the best possible experience for the specific industry they cater too. This is something important to consider when comparing the live streaming capabilities of a product like Home Live against other live streaming platforms designed for a different purpose.

Home Live is live streaming designed specifically for real estate professionals. The platform is built to provide all the tools needed to conduct, live, informative, interactive digital property inspections.

Putting the focus back on the Agent, the product was developed with the importance of relationship building and personal interaction top of mind. Offering private messaging from a potential buyer for any offer-sensitive questions or comments. Each chat transcript and interest level is saved and sent back to the agent to review and follow up with any interested parties.

Social streaming platforms such as Facebook, Youtube and Instagram LIVE offer loose viewer interaction with an existing audience. However, as these are primarily entertainment platforms, this data is not captured, qualified or pushed back into the CRM of the Agent, something unique to Home Live. Home Live also offers livestream pre-registration, meaning potential buyers can register their interest and add the stream to their calendar ahead of time, ensuring they don’t miss it and are actively engaged when live.

Further to this, if the social live stream is then posted to their page, buyers may find it difficult to link the stream to an active listing or a sold listing as the video would still be available regardless of a sale. Home Live offers in-context livestreams with property photos, descriptions and pricing, making it the go-to source for Real Estate live streaming.
Other use-case specific streaming platforms such as Zoom are best suited for business interactions (For example, at Home Live we LOVE Zoom for meetings). The tools are perfect for business meetings, but just fall short for inspections – they can’t be viewed in-context and data is not seamlessly captured and verified.

Home Live’s Smart Embedding inserts the livestream into the Agents website is unique and ensures traffic stays on the listing page rather than seeping away onto other websites or apps. Smart Embedding allows potential buyers to request livestreams and watch back previous streams whilst simultaneously capturing their lead data, feeding it back into the CRM, all from the Agency site or portal listing.

Agents using apps such as Facetime are typically limited to 1-1 calls (so unsuited to an open inspection type experience) or, in the case of pre-recorded videos there’s no interactivity or lead capture. Put another way, pre-recorded videos are just another piece of content whereas live streams are a medium of communication AND content.

With a multitude of live streaming products to choose from, each is designed with a unique use case in mind. None cater to promoting or discovering real estate better than Home Live as we understand the importance of keeping the Agent at the forefront of every deal and recognise the emotional connection that needs to be formed when making possibly the biggest purchase of your lifetime.

So, stick with the experts! Welcome Home.

Have any questions, ideas or feedback? Let us know at support@home.com.au

3 Reasons Why Livestreaming is Here to Stay

No one could have predicted the way 2020 was going to change the way we do things. The COVID-19 pandemic brought with it a level of uncertainty and a few bizarre risk adverse habits – looking at you, toilet-paper hoarders – that will stay with us for years to come.

However, the global pandemic also introduced exciting new challenges and opportunities, pushing people to adapt swiftly to the new reality or get left behind. This was no different in the Real Estate industry.

The global shift from in-person to isolated engagement meant Homeseekers and Real Estate Professionals alike had to reconsider the way they do business. In this industry, it’s no secret that building personal connections and levels of trust with both vendors and potential buyers is imperative to a successful sale. Luckily, the shift into the online space was already happening, with many in the industry already using livestreaming technology to engage an audience at scale.

Real-time virtual property inspections were already recognised and used by the Real Estate industry prior to the COVID-19 pandemic – consider, the international buyers market or rural interest. However during this time, the adoption and use of livestreaming technologies has been greatly accelerated. The public is recognising the importance of livestreaming when looking to buy a property, whilst Real Estate Professionals are becoming increasingly aware of their online presence and ability to access a much larger audience, regardless of their physical location.

As restrictions begin to ease around Australia this doesn’t necessarily mean everything will revert back to normal, in fact, here are 3 reasons why we believe virtual inspections are here to stay:

1. Livestreaming offers personal and considerate engagement

In the wake of recent lockdowns and social restrictions, new levels of anxiety have been introduced to the public. People have become increasingly paranoid about their personal space and general levels of cleanliness. Although community transmissions continue to decrease and restrictions around Australia are slowly being lifted, the feeling of uneasiness when someone stands slightly too close behind you at the Woolworths check-out remains.

In the spirit of encouraging engagement and the building of trust between Real Estate Agent and client, their preferences in regards to in-person viewing should also be considered. Vendors, in particular, have a preference for only ‘pre-qualified buyers’ to be invited to physical inspections – understandably, it is their own home. Offering the option of livestreaming to clients demonstrates the Agent is considering their preference directly and will build trust. This also gives the power back to the Agent, ensuring they remain an integral part of the property transaction process in the face of countless new technological advances.

2. Conveniently accessible for those leading busy, millennial lives

Livestreaming opens a property up to anyone with an internet connection, increasing market reach for the Agent and maximising the convenience for Homeseekers. For many people, lockdown introduced new ways of working, socialising and getting the most out of your day. Multitasking around the home, in front of a laptop or even out and about is now the norm, meaning people are looking to do more and offering an alternative way to view a property from any device at any location enables this.

From an Agents perspective, being able to reach new clients and invite and privately engage with existing clients in the same interaction is incredibly powerful, convenient and time efficient. Further to this, with Home Live, viewers equal leads as all the information on the viewers is captured as they tune in – no more running around after inspection walk-ins with a pen and a clipboard, thank God!

3. Efficiency is at the heart of the product

Efficiency and usefulness sit at the core of every Real Estate tech development as those in the industry are well aware of how time-poor these professionals can be, livestreaming with Home Live is no different. Livestreaming acts as an engagement point for any Homeseekers looking for a property but are not entirely committed to attending a physical inspection. By ensuring the leads are qualified before proceeding to an in-person inspection, both the Agent and Homeseeker are saved many hours of potential home viewing, thus reducing the time a property is spent on market and increasing the overall efficiency of the transaction.

Here at Home Live we understand the Real Estate tech-revolution will continue to change the way Agents do things. But we are working for a solution that will be powered by the Agents themselves, not one that will replace the human aspect of home buying. We believe the value of livestreaming will continue to be seen throughout the industry and will be an imperative inclusion in every Agent’s sale toolkit moving forward.

Have any questions, ideas or feedback? Let us know at support@home.com.au

Welcoming RE/MAX to Home Live

We are delighted to announce that Home Live’s live-streaming capabilities are now available to all RE/MAX Australia property professionals. This ground-breaking partnership is one of the first of its kind and was recently launched successfully to the RE/MAX network.

This integration will greatly assist in reaching potential buyers and renters both locally and internationally, connecting them to RE/MAX agents and their listings via livestream.

RE/MAX Australia Operations Director, Josh Davoren announced the launch of livestreamed property inspections will support both sales agents and property management by enabling them to engage with a wider audience and ultimately decrease time-on-market while building their personal brand.

As a platform developed specifically for the real estate industry, uptake of the product is expected to be swift, particularly given the ongoing social distancing requirements being experienced nationwide. 

“Traditionally, 99 per cent of leads are lost between the customer going to a portal and the property inspection. Through live streaming, we have added the critical step of ‘engagement’ in between the two,” Mr Davoren said.

Working closely with the team at RE/MAX Australia, we have successfully integrated all property feeds and agent profiles onto the platform using their various RE/MAX CRM partners, meaning agents simply need to claim their pre-configured accounts. Further to this, new leads both registering and attending livestreams will be fed back into an agent’s CRM for maximum time saving convenience.

In addition to these integrations, Home Live’s proprietary smart-embedding technology has ensured traffic is concentrated onto RE/MAX Australia’s own website (remax.com.au). Livestreams can be requested, registered for and watched directly through each property listing on the RE/MAX website.

This seamless system integration was built into the entire RE/MAX Australia technology ecosystem, making the use and adoption of the new tech swift in order to combat the changing landscape in the Real Estate industry, not just the COVID-19 pandemic.

“Our strategic planning had already taken us a long way down the track before COVID-19 hurried things along and we were given a tremendous opportunity to offer our network a fantastic sales and property management tool.

“The thing about Home Live is that it’s not just a live-stream app. It is a solution – a platform that helps the agent generate qualified leads and saves them time and money in getting the property sold or rented,” Mr Davoren said.

As a tech platform, purpose built to improve the lives of buyers, sellers, renters and Real Estate Professionals, we could not be more excited about this partnership.

Hold Or Release – What You Should Know About Turning Your Home Into An Investment Property

To sell or not to sell is often a question many homeowners face when they realize they have outgrown their current home and need to upgrade. The thought of keeping the property as an investment is favourable, however also comes with many risks, such as not being able to tenant it or being subjected to fluctuations in the property market.

Yet most see that accumulating a property portfolio can be a very lucrative nest egg and is considered to be a desirable way to accumulate wealth, due to capital growth and the property hopefully providing additional income.

So how do you know when to hold or release?

When To Hold

 As they say quality over quantity! High performing assets ie. properties that are high performers are worth holding on to and homeowners are able to take advantage of capital growth on two properties, especially if the first property has seen an increase on value.

In an ideal situation, the property will be working for you and covering loan repayments through rental income.

As reported by Domain, according to the founder of Empower Wealth, Ben Kingsley, if it’s been a good performing asset and you’re looking to upsize, do everything you can to hold onto it,” he said. “Why would you sell the golden goose that keeps laying eggs?”

Mr Kingsley furthered that by adding that as long as individuals can manage the holding costs, the strategy can lead to a faster increase in wealth, provided the asset is investment grade. What this means is that often a property that might be suitable as a family home, might not be the best investment.

What Is Negative Gearing And How Could It Put Me At Risk

Negative gearing is found when the costs of owning the property far exceed the rental income. Although this loss can be applied taxable income deductions, it can end up causing problems because it causes cashflow restrictions.

People often get excited about tax refunds, however it is important to remember that the reason that you are receiving a tax benefit is because you are making losses not gains, and slowing market conditions can affect how quickly losses are able to be recovered.

This can be combated by applying long-term interest rate calculations of around 7% and incorporating a buffer.

When Should I Sell

At the end of the day, your decision to sell or retain a property relies on A) your financial situation and B) the property itself, but predominantly the former.

Large family homes do not always yield the best rental income and retaining a mortgage could potentially limit your borrowing power, which may have an adverse affect on your upgrade plans.

Obviously if you own the property outright or have a small mortgage, then this would be a desirable position, however you still will be taxed at the highest marginal rate of your income on any income you earn from the property.

The best thing to do at all times is seriously evaluate your financial position and speak to a trusted adviser.


Developers Introduce ‘Preposit’ To Combat Tougher Lending Conditions

What do you do when you need to sell a massive backlog of apartments still on the market due to tightening lending conditions from the banks? You introduce a post pay method for home seekers who are struggling to save for a deposit.

First there was Afterpay now there is Preposit!

For those of you who aren’t familiar with the concept, Afterpay is a digital service that makes it possible to buy something now and pay it off in fortnightly instalments over a set period of time. Unlike a layby, you’ll get the product right away, whether you’re shopping online or in-store. And in the best circumstances, you’ll pay nothing more ie. provided you can afford the repayments.

Now however, Apartments WA are offering ‘preposit’, a service that enables struggling home buyers to rent while saving for a deposit as reported in the Australian Financial Review, ie. the Afterpay of the real estate industry.

Buyers can literally move in today and pay tomorrow, the only catch being that you need to be able to afford your loan repayments and prequalify for a loan.

It is estimated that over the next two years, there will be approximately 200,000 new apartments coming onto the market, of which most are in high-rise developments. A worrying thought to many seeing it has been well documented of recent especially in Brisbane that there is currently an over-supply of apartments with developers resorting to extreme incentives to sell them.

For example, at present developers are offering $50,000 cash incentives plus GST on top of regular sales and advisory commissions to sell luxury apartments around Melbourne.

Some are also offering thousands of dollars worth of designer furniture to be included in the sales, just to get it closed early.

Proposit – the company offering this service, states that it stores the payments in weekly instalments until the deposit amount has been reached, then give back to the buyer toward purchasing the apartment.

Although this may seem like an appealing option to those who can’t seem to save enough for that first deposit, it is very important to take into account the risk factors and additional costs that could be associated with using the service such as interest rates.

The other thing to take into account is oversupply often means that should you wish to sell your home down the line, it may be more difficult to or you may not get a price you are happy with. This particularly applies to first home buyers who often get caught up in the excitement without thinking that they may want to buy a house later on down the track yet wont have any capital growth for a decade due to the massive oversupply.

That being said, as with any large purchase, the best time to get into the property market is when you feel confident and financially ready.




The Rise Of The Buyers Agent – How The U.S. Trend Of Hiring Buyers Agents Is Capturing Australian Buyers Looking For Off Market Sales

A practice that has dominated the U.S., Canada and Europe for years is fast emerging in Australia, with many Australian house-hunters now opting to seek out buyers’ agents to help them find their dream homes, of which many are off market.

Whether it be due to lack of supply or simply because the buyer knows exactly what they want and it’s not listed, the buyer’s agent – an advocate who negotiates on behalf of a buyer, works to seek out prestige properties and investments which would usually be traded quietly off market and never advertised for sale i.e. a “whisper listing”.

Although starting in Sydney and Melbourne twenty years ago, there were only approximately fifteen agencies in the industry at that time. Now, there are currently fifty-five listed with the Real Estate Buyers Agents Association of Australia indicating that the trend has really gained momentum over the last few years across major cities.

Recently speaking to Metropole Property Strategists Chief Executive Office, Michael Yardney, Mansion Global reported “…many people think they know how to buy a house and they don’t need our services until they recognize the vendor has a trained negotiator working for them.”

However the service comes at an additional cost, often between 1.5% to 2.5% of the purchase price.

So how exactly do buyer’s agents help?

According to Sydney prestige real estate agent Ben Collier, when you’re dealing with top end properties, many potential vendors choose not to be on the market due to the public process of a traditional marketing campaign, however will be open to the idea of selling or starting discussions if you have a pre-qualified buyer. Mr Collier said that off-market deals represented approximately 40% of his overall transactions.

This is a pertinent point when it comes to the Home Live technology, as by opting for live broadcast inspections, the agent has the ability to preserve the vendors privacy, whilst qualifying potential buyers.

The two main advantages of using a buyers agent is having unprecedented access to properties not listed by conventional means—such as online listing sites and the other is their network of pro-active agents who have an equally long list of “A-list clients”.

The prevalence of off-market sales in the Australian residential market is underpinned by declining buyer interest and sellers seeking a low-profile sale without publicity, whilst at the same time avoiding marketing costs and open houses.

During the Sydney and Melbourne property boom, vendors were more likely to auction their homes because rising buyer competition allowed them to fetch higher prices.

However, the market slowdown over the past nine months has resulted in fewer buyers and knocked the wind out of the auction sails.

It has also been noted that property seekers are using buyer’s agents as they don’t want to end up paying too much for a property, or buy the wrong property to begin with. A buyers agent can help mitigate these types of risk factors whether they be prestige properties or otherwise.

If you are an agent and would like to trial Home Live prior to its official launch in the coming months, please contact info@home.com.au



When The Hammer Fails – What To Do When Your Home Is Passed In At Auction

Auction day can be one of the most emotional and unnerving moments of any vendor’s life. As potential buyers and spectators gather at the auction site, it’s hard not to imagine both the best and worst case scenarios. The auction begins and although there are multiple bidders, they are not quite hitting the mark. The auctioneer calls for final bids, of which you hope there will be one last battle to get you closer to your dream number, then you hear the dreaded words… Sorry Ladies and Gentlemen, we are going to pass this in today.

Aside from the initial overwhelming feeling of disappointment and fret, there are often many factors at play in this situation, some of which you can control eg. setting a realistic reserve, and others that you can’t, such as market conditions.

For Sydney alone, auction results from last weekend as reported by Domain, indicated that Sydney auction clearance rates tumbled to 56.4 per cent on Saturday. This is the second time in a fortnight the crucial market measure has fallen below 60 per cent, with experts claiming that buyers are too well educated now to pay ridiculous prices; and subdued market conditions are continuing to weigh heavily on Sydney’s auction performance.

So what does it mean when your property passes in at auction and what outcomes can you expect?

Time To Review

Properties pass in for many reasons, but the main reasons are because there is not enough buyer interest in your property due to lack of marketing or follow-up by the agent, poor presentation of the property or an unrealistic reserve has been set, the latter being the most common.

This is particularly common of recent as people have become accustomed to the growth that has been noted over the last three years and setting reserves accordingly with the hope that the market is still in a growth phase. However, results this year in comparison the results posted at the same time last year indicate otherwise.

According to Huss Saad, Director of Village Real Estate, realistic reserves are what lead to successful auctions and provide opportunity for competition amongst buyers.

A typical auction campaign is three weeks, sometimes four, during which your agent should have a good idea of what they think your home is worth. That market insight should influence setting the reserve on auction day. If a vendor sets the reserve too high, that can stunt bidding and an auction will fail.

What Happens When My Property Passes In?

Firstly remember all is not lost! If bidding does fail to meet the reserve, it doesn’t mean that your home will not sell. If the owner and agent work together and the vendor is reasonable, there should be opportunity to sell within the next week or two.

In most instances, the highest bidder has the first right to negotiate a price with the agent acting on behalf of the vendor. If a price cannot be agreed on, then the agent then has the right to negotiate with the other potential buyers.

What If We Can’t Reach An Agreement?

 In the unfortunate event that none of the bidders meet the vendor’s expectations immediately after the auction, the property can then be listed for private sale.

However, the agent will need to conduct a full review of the campaign to determine what factors led to the property not selling and implement a new strategy to mitigate these factors. However according to Mr Saad, in almost all cases, “It is the price”.

It is also important for agents to re-launch the property on the market like it was entirely new again ie. Introducing an entirely new marketing campaign, keeping the pressure on and database active.

So How Do I Set A Realistic Price Without Totally Compromising My Expectations?

Research! It is important as a vendor to stay abreast of current market conditions. This includes everything from monitoring tighter lending regulations, to stats in both your suburb and city relating to sale results.

But most importantly, it pays to be reasonable, as unrealistic vendor expectations can be problematic throughout a campaign, and more often than not will lead to an unsuccessful campaign because underquoting laws mean properties can’t be advertised for lower than the vendor’s asking price. You may get lots of groups through the property, but those people coming through are coming in at a higher price, so they will be expecting a better property.

This above fact is particularly important these days as with the influx of property technology emerging on the market allowing people to view properties via their smartphones, you potentially won’t event see groups through in the future if your property has been priced incorrectly as the potential buyer will have the opportunity to view multiple properties online via a live inspection platform such as Home Live prior to inspecting them physically, allowing them to compare your property immediately with several others in the same category.

However, this also falls with the agent whose job is to manage vendor’s expectations especially when they are out of line with current market conditions.

At the end of the day, the more upfront the owner and agent are with each other from the get go, the more likely you are to achieve a successful result.

It Pays To Be A Good Kid – Tougher Lending Terms & Conditions See Bank Of Mum & Dad Rise 25%

Tougher conditions imposed by banks, rate rises, increased minimum deposits and harsher repayment terms, has seen parental lending increase by 25 per cent to about $20 billion in the past 12 months as reported by the Australian Financial Review, and it’s only going to get worse according to RBA governor Philip Lowe and ANZ CEO Shayne Elliot, who both warned this week that loans will become even more difficult to get after the poor behaviour of banks exposed in the banking royal commission.

In staggering findings, the Bank of Mum and Dad, a term coined to describe parent lending to their children for property purchases, is now the tenth largest lender in the country, bigger than ME Bank, AMP Bank and the local operations of global banking giants like Citigroup and HSBC Australia.

Younger property buyers increasing reliance on parents to get into the property market reflects tougher lending conditions and difficulty saving deposits in rapidly rising property markets.

Martin North, Principal of Digital Finance Analytics, which complies the annual survey on parent financing of home loans, confirmed this commenting that “savings for a deposit is very difficult at a time when many lenders are requiring a larger deposit as loan to value rules are rising”.

Furthermore, younger buyers also find it difficult to save because of flat incomes, rising costs and the need to have a sizeable deposit to qualify for generous state-government first home owner grants.

At this stage, more than 55 per cent of first time home buyers require financial assistance from their parents, with the average cash contribution being around $89,000.

Yet despite the fact that the number of children needing financial assistance getting into the property market is increasing, the total number of first time home buyers continues to fall, meaning many without parental support could be giving up.

There are risks however associated with this strategy for both the parents and the children, especially if prices continue to fall from current levels, however for many, it’s really the only way to get a foot in the door.


Helpful Links

© 2020 Honed Real Estate Pty Ltd. All Rights Reserved.
Built by Honed Digital.