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There have been many discussions and concerns voiced around the impact of overseas investors on the Australian residential property market in recent times. What impact, if any, is there for commercial real estate?
Overseas investment in commercial real estate is poised to rapidly rise, particularly in NSW which attracted 94 per cent of commercial property investment in 2015.
China was the biggest overseas buyer of Australian commercial real estate last year, purchasing over one third of commercial real estate across Australia, followed by Singapore and the United States.
Keeping these figures in mind, there is a good chance that if you are selling your property, it will be to an overseas investor. So what are the steps that you need to take to make sure your property sale progresses?
- If the purchaser is borrowing funds to buy the property, make sure they are dealing with a bank which operates in Australia. If for some reason the sale doesn't proceed due to the purchaser's finance, it's much easier to liaise with an Australian bank rather than one overseas.
- If the purchaser is a non-resident, then the purchaser, in certain circumstances, will likely need to obtain approval from the Foreign Investment Review Board (FIRB). This can be a lengthy process and may delay settlement of your sale. The FIRB may also withhold approval for the non-resident's purchase, which will mean that as the vendor, you'll be unable to complete the sale. The remedies would be contained in the contract and may involve a forfeiture of the deposit paid by the purchaser with recovery action taken by you after re-sale.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
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