Looking for advice/potential broker - Non PR

Hi All,

I am from the UK and moved to Australia last January, starting working in Melbourne in July. I work for a big 4 accounting firm who I also worked for in the UK, I am currently paid ~$85k which will go up to ~$100k+ in the next 12-18 months. I moved with my partner and we are currently on temporary skill shortage visas (482- Medium Term stream) with the goal to stay here until we gain PR and following that, citizenship. We have around ~$30k in savings which could be increased to $50k+ by next July (the earliest possible time we are considering purchasing a property).

Currently we are considering whether our best bet is to try and purchase a property now, or invest our excess income in ETFs until we become a permanent resident and have to suffer less costs involved in purchasing the property later.

From a personal perspective we feel that if we got a good property now (most likely a 2 bedroom apartment, I understand it would have to be new build), we could remortgage to get a house a bit further out when we had PR, but if we waited until we got PR we would likely just go for the house.

Areas we have been looking at are suburbs such as Footscray/Altona/Moonee Ponds/Coburg/Preston, however we are pretty flexible on this front and would definitely consider any area of the city as long as we felt there was a bit of life in the town, some good transport links and it was a relatively smart investment.

Just looking for some advice, would you guys recommend trying to purchase a property without PR? I understand there's fees related, some banks won't take you on and we will miss out on homebuilder grants etc. but still feel there may be an advantage here as we save on paying rent for another 4 years? Of course as an accountant I will be doing a cost/benefit analysis . If you think it would be worthwhile which areas/new developments you would either recommend or common traps you would suggest we keep an eye out for.

Thanks! I wasn't sure whether to post this here or the introductions section - so apologies if this isn't the right place.

 

even 50k in savings is extremely light. How much are you looking to buy for? First step is to talk to a mortgage broker.

 

That's why I am posting here, to see if there's mortgage brokers who specialise!

We are aiming for $400k-$500k, maybe a bit more if necessary, as we have to go for new builds we thought we might have a bit of a wait period to further build a deposit, we are currently in a position we can save a lot of our income and I know some developers will contribute here too. We also have family members we could possibly fall back on if the deposit needed to be closer to the $100k range, obviously very dependent on the situation.

 

I hate to say it, but you're facing an uphill battle at this point in time.

It is possible (but difficult) to get finance in Australia as a non resident. For the very few lenders that can assist, they'll require a reasonably large deposit. 20% would be the absolute minimum, but it's really likely to be 30% or more.

The second challenge is that of stamp duty. I believe in Victoria as a non resident you'd face additional stamp duty surcharges. This further increases the funds you'll need.

Without looking into it too far, I'm guessing you'd need between 30%-40% of the purchase price to be successful.


The good news is that once you obtain permanent residency, the criteria becomes a lot easier. Most lenders would be happy to help and you could borrow 90% of the property value. You may not be eligible for some of the government assistance available to citizens, but the worst case scenario is you'd need 17% of the purchase price (10% deposit, 5% stamp duty, 2% mortgage insurance).

 

Also some banks offer no LMI loans for high LVRs if you are a CA.

 

Hmm ok - thanks for letting me know, I was seeing 15-20 online but was questioning the accuracy of this myself.

Looks to be at least a few years off being realistic, there's a process for me to obtain PR earlier, so I think at this stage our best bet is to build our savings and check back in in a year (when we can consider applying for PR ourselves - a costly process compared to doing it with my employer in 3 years time) to consider whether this would be worthwhile and if not just rent until I get PR through my employer.

Thanks for your help though! To be honest what you have said is exactly what I was worried about so good to have it affirmed.

 

I've don't loans for non residents before, but not in the last year or so. Generally you're going to need at least a 20% deposit as mortgage insurance isn't going to be available. Stamp duty is higher as well, normally 5%, but for non resi it's quite a bit more. Hence my estimate of a minimum of 30%.

It's anecdotal, but I suspect that is going to be the best case scenario right now. Let me stress that this is optimistic.

 

As a Non Resident lender our maximum lvr for a 482 Visa is 70% meaning 30% deposit plus Foreign Buyer duty etc

Cheers


Richard