People buy homes in another city for various reasons, including economic and lifestyle considerations. Below are some of reasons:
- Want to move from a high-cost-of-living area to a lower-cost-of-living area: Many Australians relocate from cities like Sydney and Melbourne, where property prices are high, to more affordable cities such as Adelaide or Hobart. This allows them to reduce their mortgage burden and enjoy a better quality of life.
- Change of job: A new job opportunity in another city often necessitates relocation.
- Buying an investment-attractive house in a promising city: Investors may purchase property in cities with growing markets, such as Perth, which has seen increasing demand due to the mining boom.
- Better lifestyle and climate: Some people move to coastal or regional areas to enjoy a slower pace of life and better weather.
- Retirement relocation: Many retirees choose cities like Gold Coast for its relaxed lifestyle and access to healthcare and recreational activities.
In all these cases, it is important to understand how to proceed correctly step by step and make the most correct financial decisions with the least amount of effort. Let’s figure it out.
It is always better to live for a while in the area you are planning to move
It would be weird to move to a new city or even country without living there for a while, right? And we are not talking about a couple of days spent in a hotel during a vacation. This is about living for at least 1-2 months specifically in the area where you are planning to move.
What are the benefits?
- Smoother process: When you finally move in, you’ll already have a temporary place to stay while you organize your move.
- Know the area: Living in a city helps you evaluate things like amenities, transportation, and community atmosphere.
- Explore different areas: Renting allows you to test out different suburbs before you make a decision.
- Networking opportunities: Talking to locals can provide valuable insight into real estate conditions and upcoming developments.
If you have the opportunity to live in the area where you are going to buy a house, but you do not do it, you are definitely making a mistake.
The main thing in this case is not to drown in this choice. Sometimes people move with the intention of looking at 5-6 areas in 2 months, making lists of PROS\CONS for these areas, but this turns into two problems. On the one hand, you get lost in too much choice. On the other hand, it may turn out that in the area you have chosen there was no house suited to your financial opportunities, but you are already too fixated on the criteria of the ideal area.
Make things simple: live a couple of months in the area you have chosen. Feel it. And then just answer ‘yes’ or ‘no’.
How long can it take to buy a house in another city?
Many people think that buying a house is a quick process. However, different cities and countries have different rules and it takes time to comply with them. For example, you often can’t buy a house without a building inspection or without a residence permit in another country.
On average, buying a house in Australia takes 30-90 days, which includes drawing up a contract, negotiations between the seller and the buyer regarding the terms of the contract, approval of a loan from a bank, inspections, etc. Relocation companies can speed up the process to a few weeks, but most often their services are used by those who are changing their place of residence at the expense of their employer.
Here is a small table of how the relocation time may change depending on your intentions and circumstances:
| Condition | Estimated Timeframe |
| Pre-approved financing, familiar city | 1-2 months |
| No pre-approval, need for property search | 3-6 months |
| Interstate purchase requiring research | 4-8 months |
| International purchase requiring FIRB approval | 6-12 months |
So, what preliminary steps should I take?
- Research the Market: Study price trends, rental yields, and demand in the target city.
- Visit the City: If possible, visit in person to explore neighborhoods.
- Engage with Local Real Estate Agents: Work with multiple agents to get a better selection of properties.
- Secure Pre-Approval for Financing: This streamlines the buying process.
- Shortlist Properties and Conduct Inspections: Verify property conditions before making an offer.
- Understand Legal and Financial Requirements: Each state has different stamp duty and taxation laws.
How can we buy a house in another city so that we not only like it but also find it a profitable investment?
If you are looking for where to buy investment property in Australia focus on long-term value and market growth. Engage with local real estate experts and financial advisors to understand pricing trends and potential rental yields.
Before committing, conduct thorough inspections and legal due diligence to ensure there are no structural or legal issues. Also, evaluate property management services if you intend to rent it out. A profitable investment is not just about purchase price but also long-term sustainability and ease of maintenance.
What difficulties might arise when taking out a loan for housing in another city?
Taking out a loan for housing in another city presents challenges due to varying lender policies and market conditions. One of the main issues is that banks and financial institutions may have different risk assessments for interstate buyers, affecting loan approval and interest rates.
Property valuation disparities can also arise, as local market trends fluctuate, impacting the bank’s lending criteria. Additionally, state-specific stamp duties and legal fees vary, influencing the overall cost of purchasing a home.
If you are unfamiliar with the city, you might struggle to provide necessary proof of stability, such as employment history or rental records, which can make loan approval more difficult. Remote property purchases also require more documentation, and lenders may demand additional guarantees.
What difficulties might arise when taking out a loan for housing in another country?
International buyers in Australia must obtain Foreign Investment Review Board (FIRB) approval, adding complexity and potential delays to the process. Many Australian banks impose strict lending criteria on non-residents, including higher deposit requirements and interest rates.
Taxation laws differ for foreign buyers, and some states impose additional stamp duty surcharges on international property investors. Additionally, proving financial stability and creditworthiness is more difficult if you do not have an Australian credit history.
Some Examples:
From America to Australia: Mark and Lisa, a couple from California, moved to Melbourne due to Mark’s new tech job. They faced difficulties securing an Australian mortgage due to limited local credit history but resolved this by working with an expat lender specializing in U.S. citizens. They also had to meet FIRB requirements and pay additional stamp duties before purchasing a home in Fitzroy.
From China to Australia: Wei and Ling relocated from Shanghai to Sydney to provide better education opportunities for their children. They encountered strict foreign investment regulations, requiring FIRB approval before making an offer. They worked with a bilingual real estate agent to navigate the process, secured financing through an international banking institution, and purchased a property in Chatswood.
