Steve Jovcevski – Buying Luxury Property: 4 Questions You’ll Want Answers To

External view of a modern house with pool at dusk

Whether it’s a multimillion terrace or a mansion by the water, investing in a luxury property is a dream for many Australians. But what you might not know is that, aside from the higher price you’ll need to pay, there are a number of other differences between purchasing a luxury property and a normal house.


From identifying the right property to securing a home loan, read on below for answers to some of the most common questions about the luxury property buying process.


Will I need a larger deposit?


One of the major differences between buying a luxury property and a normal property is the risk to the bank or lender. By its very nature, luxury property is harder to sell because there are fewer people able to afford the price tag, which makes it a riskier proposition for banks (in case a buyer defaults and they need to sell it).


That’s why the deposit you’ll need to put down to secure a home loan on a luxury property is going to be larger. Typically the LVR (loan to value ratio) for a regular property will be around the 80-90% range, but luxury properties can attract LVR’s anywhere from 70% down to 40%.


Will my home loan be more expensive?


Unless you’re paying in cash, you’re going to need a home loan to secure a luxury property.


Many of the special home loan deals at the lower end of the market are only available to buyers borrowing between $250,000 and $1 million though. Once again, this is about lenders minimising their risk, so it means that you’ll likely be charged a higher interest rate if you need to take out a mortgage for your luxury property beyond those figures.


Speaking of costs, luxury buyers should be prepared to fork out higher property valuation fees. These are often included in the home loan application fee with normal purchases, but more expensive property generally require more extensive valuations, you could be charged hundreds or even a couple of thousand dollars.


Do I need a buyer’s agent?


If you’re looking to make a splash at the top end of the market, it might be worth enlisting the help of a buyer’s agent to locate the right property and act as a negotiator on your behalf. Buyer’s agent’s do come at a price though, generally 1% of the sale price, so it’s worth doing your research to find the right agent to help you with your purchase.


While you might not need one if you’re familiar with the area or are happy to negotiate yourself, a buyer’s agent could be worth their weight in gold if you’re buying out of state or in an unfamiliar area.


Are there overseas buyer restrictions?


If you’re looking at investing in luxury property in Australia as a foreign buyer there are a number of steps you’ll need to take before you think about putting in a bid. Generally international buyers need to be granted approval through the Foreign Investment Review Board and you’ll likely be encouraged to purchase a new dwelling which may limit your luxury property options.


It’s also worth bearing in mind that a number of Australian states have also introduced new levies and taxes that could prove significant extra costs as a foreign buyer.



About Steve Jovcevski

Steve Jovcevski


Steve is a property and lending expert at financial comparison website With an extensive knowledge of the Australian property market and home loan industry, Steve is full of practical tips and insights to help Aussies navigate the world of property.





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