How to Get a Head Start When Buying Property in Australia

January 31, 2022

News Image

You want to buy a new home, but where do you start?

It can be really confusing. Do you take a home loan first then get a house, or is it the other way around?

Buying property is probably one of the most life-changing decisions you’ll ever make. Whether you're a first-time homebuyer or a seasoned investor, don't jump into the homeowner process without doing your homework first—research, research, research!

That's why we've put together this guide to help you get a head start when buying property in the land Down Under. From planning to budgeting and inspection, we’ve got you covered.

Plan for the Investment Property You Want to Buy

Off-Market Properties: Financing Options for Young Couples

The saying goes, “Look before you leap,” which is especially true when buying a property. Before you start looking for your dream home, take a deep breath and ask yourself some questions.

Why do I want to buy a property? Am I tired of paying rent, or am I looking for a family home?

What investment property do I want to buy and where?

You also need to work out what property type you want. Are you looking for an apartment or a house?

What features are most important for your lifestyle? Do you need a home with a car space? Maybe an outdoor space? Or do you want to buy an investment property while still renting?

Homes are costly, so you should only get one if you believe it’ll benefit you in the long run. Don't feel compelled to buy a house because of the perceived social status of living the "great Australian dream."

Whatever your motive for buying, your first priority is to figure out your long-term plan.

The more research you do now, the easier everything else becomes.

For example, extra costs account for approximately 5% of the purchase price when buying a home. This often depends on the value of the property and where it’s located.

As you plan, factor in the following fees:

Stamp duty Depending on the state, it ranges from 3.5 to 5.5%.
Legal fees Depending on the type of property, it might range from $800 to $2,500 AUD.
Land tax The tax varies based on the state where you buy your land.
Property inspection fees Depending on the type of property, it’s usually between $450 and $800 AUD.
Loan establishment fees Depending on the lender, it might range from 0 to $1,000 AU.
Other ongoing costs Water rates, building insurance, council rates, maintenance costs, etc.

Fortunately, Listing Loop gives buyers VIP access to properties that real estate agents have listed for their sellers. We provide you with a head start for off-market properties, so we’ve shortened the research process for you.

Off-market properties (or secret listings) are usually up for sale but aren’t advertised publicly through mainstream real estate channels. With Listing Loop, you can jump the queue and get in before everyone else.

To simplify your planning process, sign up today to get free access to newly listed properties.

You can also watch the video below for more information:

Determine Your Budget and How Much You Can Borrow

While planning, you should work out your budget—the most important step before buying a property.

Having a solid budget helps you know exactly how much money you have for saving, paying the deposit and mortgage repayments.

To help you out, here are the current median house prices in each of Australia’s capital cities:

City Median House Price
Adelaide $599,706
Brisbane $632,999
Canberra $927,577
Darwin $554,295
Hobart $601,567
Melbourne $974,397
Perth $578,612
Sydney $1,309,195
National $899,509

When taking out a mortgage, it’s a good idea to get a home loan pre-approval—this is slightly different from a full home loan application but gives you an idea of how much you can borrow.

To get pre-approval, you’ll need to provide some basic information about your income, expenses and a rough idea of the amount you need to borrow.

The amount you can borrow varies from lender to lender, and many include online calculators to help you figure out how much you qualify for.

Alternatively, you can contact a service like Lending Loop, who compares loans from over 35 lenders to help you get the best deal. They'll land you a great loan with low-interest rates so you can achieve your financial goals.

To avoid paying for lenders mortgage insurance (LMI), it's often best to have a house deposit of at least 20%.

For example, if you were to buy the average house in Canberra, you'd need a deposit of at least $185,515. If this is out of your price range, you may need to explore cheaper alternatives.

There are exceptions to this for first home buyers. According to Finance Matters, eligible first-time home buyers with a Loan to Value Ratio (LVR) of up to 85% will have their LMI reduced to only $1.

Another reason for figuring out your borrowing power is, even if you have a 20% deposit, lenders may not be ready to give you the money you need to buy the property.


The lenders check your credit history, income and expenses to assess how much you can borrow. If your record is poor, they may not award you a considerable sum.

Also, if you have children, the amount you can borrow decreases significantly (in some instances, by up to $50,000 per child) because banks are well aware of the costs of raising kids.

That said, look for ways to increase your borrowing power. Did you know that having a high credit card limit impacts how much you can borrow?

Consolidating your credit cards into one new low-rate card can help cut your credit limits and improve your overall financial position.

Finally, apply for a copy of your credit report and make sure you pay all your debts. It might not be ideal for you to buy a home if you have bad credit.

Inspect the Investment Property You’ve Chosen

Now that you’ve organised your finances and found a great property, don’t sign anything just yet. You’ll need professionals to inspect the building.

Inspections are one of the most critical (yet often overlooked) steps in the home-buying process. If you want a home that’s worth the money and time you've put in to securing it, you need to do this step well.

Pest and building inspection lets you know about any nasty surprises, such as a termite infestation or a structural problem with the building.

The inspections are likely to cost between $450 and $800 AUD but don't be put off by the price. After all, buying property without these inspections is like buying a car without taking it out for a test drive (but with much worse consequences).

When performing a home inspection, here are some of the most important things to look for:

  • Dampness
  • Wall cracks
  • Electrical issues
  • Plumbing issues
  • Cabinet and drawer defects
  • Termite activity
  • Wall plastering
  • Roof quality
  • Drain holes

It's important to note that home inspections aren't necessarily a pass or fail situation. Instead, they’re typically done to provide you with a clear picture of what you can expect from a property.

Ultimately, regardless of the drawbacks, it’s up to you to decide if it makes sense to add the cost of repairs to the buying price or to walk away from the deal altogether.

Join Listing Loop to Get a Head Start When Buying a Home

It’s essential to do your research and take home buying step by step. As this is one of the most significant purchases you’ll ever make, you need to make a careful and informed decision.

To get a head start when buying a property, use a trusted marketplace like Listing Loop. Here’s what one user said,

“Very Prompt and Professional service.”- Sabina Luthra

You just have to sign up for the Listing Loop service via your computer or download the free app and choose the type of property you're looking for.

FAQs About Investment Properties in Australia

Is Property a Good Investment in Australia in 2021?

Property is one of the most obvious no-brainer investments in the current Australian market. Real estate may not have the pace of cryptocurrency or stocks in capital growth, but it’s the best option available to produce consistent results over time.

With this in mind, mortgage brokers should educate their customers about the potential to expand their property portfolio and reap the benefits in the long run (as price growth doesn’t appear to be slowing anytime soon).

How Do You Negotiate With Real Estate Agents in Australia?

Negotiating with a real estate agent can be difficult, especially if it's your first time.

We've put together a few pointers to help you put your best foot forward:

  • Do some research
  • Make sure you have pre-approval
  • Know your bargaining strength
  • Know your limit
  • Don’t appear too keen

How Much Does It Cost to Hire a Good Property Manager?

The answer is, “It depends.” Property management companies differ significantly, and a lot depends on the extent of the agreement.

The cost may vary depending on:

  • Location
  • Type of property
  • Estimated person-hours involved

Get on board with Listing Loop today to get a headstart when buying your property.

Photo by Pressfoto / CC BY


The latest listings direct to your inbox

Discover pre-market and off-market properties you didn’t know were for sale. Listing