Beginner's guide
to buying property.

Section 1

Know your needs.

Make a list of your needs: Do you need quick access to public transport? Do you have a growing family that requires more space and more rooms? Are recreational facilities important to you? Depending on your purchasing motivation, for your own occupancy or as a rental property, where should you buy?


Sort the list in order of importance, and with this, you can easily shortlist properties to those that match the criteria at the top of the list.

Section 2

Set a budget.

Your eligibility for a loan
Before you plunge into the process of buying a property, check that you actually qualify for a loan and how much. You can speak to several lenders who can provide professional advice and even offer you a pre-approved loan.


A larger deposit amount will help you get lower interest rates—a reasonable deposit is 20%. If you borrow more than 80% of the property’s value, the lender will usually ask you to pay a lenders mortgage insurance.


Your monthly commitment, now and future
Be honest with yourself about your current and future circumstances. Are you planning to start a family or taking some time off to travel? Would this significantly affect your monthly budgeting?


Additional costs and fees
On top of the deposit, you will have to allocate funds for:


  • legal and conveyancing fees;
  • financial adviser fee (if any);
  • loan establishment fee;
  • goods and service tax;
  • land transfer duty (stamp duty).

Besides the repayments throughout the loan period, usually 30 years, there are other periodical costs, such as insurance, council rates, and land tax.

Section 3

Check for concessions.

You might be eligible for concession that would reduce the cost of home ownership significantly. For instance:


  • The First Home Owner Grant (FHOG) scheme – a one-off grant that offsets the effect of GST for first-home buyers.
  • Land transfer duty exemption or reduction – this includes for first-home buyers and pensioners, or when buying off-the-plan property or a principal place of residence.
Section 4

Do your research.

If you are considering a new, off-the-plan development, make sure that the developer has a good track record of delivering quality construction and finishing, in a timely manner.


Since you cannot view the actual unit before purchasing, you should study the proposed development plans, layout design, construction schedule, and quality of fittings and fixtures. It is important that you are satisfied with the level of details that the developer has disclosed.

Section 5

Compare prices & specs.

Understand the market value of the property you have your eye on. Research median property prices and trends in the area, and speak with agents. This list of resources compiled by Consumer Affairs Victoria is a good start: property data.


The more information you have, the more informed a decision you can make, and the more confident you will feel about your purchase.


Section 6

Pay the deposit, get a loan.

When you have made up your mind, pay the deposit to secure the unit that you are interested in. For off-the-plan property purchases, a 10% deposit is required.


Developers generally give you 30 days from the date the contract was signed to obtain the necessary financing from a lender.

Section 7

Read the contracts, negotiate terms.

Understand all the terms and conditions in the property and loan contracts before signing. Seek advice from independent parties, if needed, and if you are dissatisfied with any of the terms and conditions, you can initiate a negotiation.

Section 8

Prepare for settlement.

Check regularly on the progress of the building. About three months prior to settlement, get your finances in order. When construction is complete, conduct a pre-settlement inspection, with a professional building inspector if you like, and request for any defect or quality issue to be fixed.


When you are satisfied, the lender and conveyancer will arrange the settlement and pay the balance amount. After that, the property is all yours!

A note for non-residents…

A non-resident is required to get permission from the Foreign Investment Review Board (FIRB) to purchase property in Australia; the fee for doing so is dependent on the value of the property, starting at AUD5,000 for properties priced at AUD1 million or less. There are exemptions from the FIRB approval process, such as if the property developer has obtained an exemption certificate for the new property.


Besides the land transfer duty, foreign buyers of properties in Victoria are required to pay a foreign purchaser additional duty (FPAD). The additional duty rate is 7%.

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