Buying a house on a 457 visa

niamh19841

Hi Guys,
We recently secured our 457 visa and we're thinking of the not too distant future. I am interested to hear if anyone has bought a house on this visa and what was involved. We are located in Sydney.
Many Thanks.

mandrake04

It can be done but you have to get approval from the FIRB and I think you would probably need at least 20% deposit just to avoid the dreaded MI.

Have a look at these pages

http://www.homeloanexperts.com.au/non-resident-home-loans/firb-approval/
http://www.homeloanexperts.com.au/non-resident-home-loans/work-visa-loan/

hussey

niamh19841 wrote: »

Hi Guys,
We recently secured our 457 visa and we're thinking of the not too distant future. I am interested to hear if anyone has bought a house on this visa and what was involved. We are located in Sydney.
Many Thanks.

You can indeed, but it depends on your history, money, job etc
usually you can borrow 80% of the value.
You can borrow 90% if you have been in your job for 12months and have the 10-15% in some kind of savings (term deposit/shares/savings acc etc) This can be abroad by the way
up to 95% if in a de facto relationship with an Aussie citizen

again depending on your situation you may need approval from the FIRB
link here

You cannot apply for any homeowners grant / first time etc

I would suggest talk to a mortgage broker, as it will all depend on your situation. I work for a bank/finance company and I know a few people who have done it

gonedrinking

best wait for the housing crash before buying, its bound to happen in the next 2 years if prices keep rising at the current rate

hussey

gonedrinking wrote: »

best wait for the housing crash before buying, its bound to happen in the next 2 years if prices keep rising at the current rate

Yeah that's killing me I've been waiting 4 years for a crash, but with interest rates so high, and not much chance of any recession

here is an interesting link
http://www.westpac.com.au/docs/pdf/cb/Sydney_Property_Markets_Outlook_2010_-_2012.pdf
http://scottbanks.com.au/2010/02/25/sydney-property-boom-tipped-for-2010-a-very-strong-tip-to-put-your-house-on/

niborm

hussey wrote: »

Yeah that's killing me I've been waiting 4 years for a crash, but with interest rates so high, and not much chance of any recession

here is an interesting link
http://www.westpac.com.au/docs/pdf/cb/Sydney_Property_Markets_Outlook_2010_-_2012.pdf
http://scottbanks.com.au/2010/02/25/sydney-property-boom-tipped-for-2010-a-very-strong-tip-to-put-your-house-on/

It must be frustrating hussey but I like your patience! It just seems implausible that this is not a large bubble. Being Irish and still in Ireland I may be over-sensitive but...I was close to moving to Sydney recently and spent a lot of time reading about housing. Everything points to a pretty large correction in house prices. Imho of course.

Australia is different to Ireland in many respects (esp. interest rate control) but the growth levels still appear to be absurd. Trawl through a few Irish forums from 2006 and some current Aussie ones and the parallels are unmissable in the way people think about things. Logic is often skipped when so much personal money is at stake.

The problem with getting real information is that the vested interests in relation to property are so numerous. Banks love to lend. Newspapers love the glossy property sections and the associated revenues. Estate agents, well, a charming bunch they are. Even people without property have an interest in the prices falling. And of course the taxes are like heroin for the government.

Only wiki but the divergence is disturbing...
http://en.wikipedia.org/wiki/File:20100517_Australian_House_Price_Index_1986_-_2009.pdf

One article I remember seeing...
http://www.centreforeconomicstability.org/2010/07/17/grantham-on-the-australian-housing-market/

OP, apologies for rambling, as all you asked was could you do it on a 457, not should you!!

ballooba

Rent is extortionate and even then it's a pittance compared to a mortgage. I wouldn't buy in Aus right now even if you put a gun to my head. 4 years is a very short amount of time when you consider a 30 or 40 year mortgage.

mandrake04

I Wouldn't advise buying on a 457 unless you were guaranteed PR (nothing is guaranteed with DIAC), if you had to leave Australia you would be forced to sell and if a correction did take place you would be in negative equity.

jackbhoy

niborm wrote: »

It must be frustrating hussey but I like your patience! It just seems implausible that this is not a large bubble. Being Irish and still in Ireland I may be over-sensitive but...I was close to moving to Sydney recently and spent a lot of time reading about housing. Everything points to a pretty large correction in house prices. Imho of course.

Australia is different to Ireland in many respects (esp. interest rate control) but the growth levels still appear to be absurd. Trawl through a few Irish forums from 2006 and some current Aussie ones and the parallels are unmissable in the way people think about things. Logic is often skipped when so much personal money is at stake.

The problem with getting real information is that the vested interests in relation to property are so numerous. Banks love to lend. Newspapers love the glossy property sections and the associated revenues. Estate agents, well, a charming bunch they are. Even people without property have an interest in the prices falling. And of course the taxes are like heroin for the government.

Only wiki but the divergence is disturbing...
http://en.wikipedia.org/wiki/File:20100517_Australian_House_Price_Index_1986_-_2009.pdf

One article I remember seeing...
http://www.centreforeconomicstability.org/2010/07/17/grantham-on-the-australian-housing-market/

OP, apologies for rambling, as all you asked was could you do it on a 457, not should you!!

High and increasing property prices do not nessecarily indicate a bubble. I don't know enough about housing market in Aus to comment on specifics but IMO it bears little resemblence to our house of cards where most of the countries wealth was being generated directly from some element of the property market. Most of the ever increasing population of Australia want to live in a handful of coastal cities so it's hard to imagine demand falling off enough to cause a crash. You may see a slight drop off or correction in prices but if you are holding out for an Irish style price drop of 40-50% you might be waiting a while.

Btw I refused to buy in Ireland during the boom and posted on here and askaboutmoney back in 2006 that the whole thing was one big swindle so I am not one of those get on the ladder now at all costs types.

Sorry for going even further off topic!

hussey

Yeah I doubt with the interest rates the way they are we'll see a 'crash' as such, but I'm hoping for a slow down at least, maybe 30% would be nice :-)

ballooba

Things are looking quite dicey for the Australian economy right now from my perspective. There is already a definite slowdown in many regions. The dependence on property derived income equates to that from mineral resources. That income is drying up and it's a self-reinforcing cycle. Some further reading:
http://www.thepropertypin.com/viewtopic.php?f=11&t=26758
http://www.somersoft.com/forums/forumdisplay.php?f=36
http://www.creditcrunch.co.uk/forum/forum/57-australian-economics-%26-finance-forum/