Sydney property – top tips

Tip one

Australia’s 17 years of economic growth is now under threat due to the sub-prime crisis, rising food and fuel prices. Inflation has now climbed to 4 percent, well above the 3 percent limit maintained since the mid 1990s. This has prompted the International Monetary Fund (IMF) to cut Australia’s economic forecast in April 2008 to 3.2 percent and 3.1 percent for 2008 and 2009 respectively.

Tip two

While affluent Sydney is dotted with pricey houses and imposing condominiums, it’s a different story altogether on the city’s westside where the majority of the city’s six million residents are struggling to get by. Many have been hit by rising inflation, falling house prices of between 20 to 50 percent, plus a 12-year high mortgage interest rate of 9.5 percent (as of August 2008).

Tip three

Neither Sydney nor Australia in general has been affected to the extent seen in countries such as the US, the UK or Singapore. As a result, both are still seen as a comparatively attractive investment destination.

Tip four

A number of attractive condominium projects have currently been released onto the market in Sydney recently, among them, the Pavilions on the Park in St Leonards development. The project is located alongside the green expanse of Newlands Park on the Lower North Shore.

Tip five

Gross rental returns in the city are at approximately 5 per cent per annum, slightly lower than those available in the booming Gold Coast.

Tip six

As with elsewhere in the country, the Australian government requires all foreigners intending to acquire real estate in Sydney to seek prior approval from the government through the Foreign Investment Review Board (FIRB) unless specifically exempted by the Foreign Acquisitions and Takeovers Regulations.

Tip seven

All contracts by foreign persons to acquire interests in Australian real estate must be made conditional upon foreign investment approval, unless approval was obtained prior to entering into the contract. For properties to be purchased at auction, prior foreign investment approval must still be obtained and advise provided whether the parties were successful or not, and if so, a copy of the signed contract forwarded to the Foreign Investment Review Board (FIRB) after the auction.

Tip eight

Once approved, foreigners are allowed to buy only brand new residential developments. Only Australians and PRs are allowed to buy on the secondary market.

Tip nine

Foreigners who own properties certified as Integrated Tourism Resorts (ITR) are not required to have foreign investment approval on either land or unit purchases. However, for resorts designated as ITRs from September 1999, the exemption only applies to developed residential property which is subject to a long term (ten years or more) lease to the resort/hotel operator, making the property available for tourist accommodation when not occupied by the owner.

Tip ten

Foreign nationals are only permitted to purchase new properties which means renovation is not an option under normal circumstances.

Guide to buying condos in Sydney
Guide to buying houses and land in Sydney
Guide to real estate in Sydney