Misunderstandings about foreign buyers investing in Australian farms
In recent years, more and more foreign buyers showed their interest and have invested in Australian farms. However, due to the differences in agricultural geographical features, human environment, social system, laws and regulations, and economic order between Australia and other countries. There are hundreds of thousands misunderstandings when investing in Australian farms. Here, I will give you a general introduction and explanation of some common issues of Australian farm investment.
Buying a small farm in Australia and living as a farmer in paradise
Most foreign buyers are looking for a relatively isolated, backward, and rarely visited the place with beautiful mountains and rivers, and spend little money to build a place that is far away from the hustle and bustle of the city, close to nature, and belongs to one’s own territory. It is best to find such a place in Australia. Close to the sea, buy a small farm, return to simplicity, and live a happy life in a paradise.
Well, I have to say this fantasy is not going to be true.
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First of all, the Australian government stipulates that overseas people cannot buy leisure farms.
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The Australian Foreign Persons Investment Board (FIRB) clearly stipulates that overseas buyer is not allowed to purchase recreational farms.
The so-called lifestyle farm or hobby farm refers to the residence and land that does not carry out agricultural production and farming but is only for living and recreation. Generally, most farms with an area of ​​fewer than 200 mu close to the central city are in this category.
This is not difficult to understand. Because the Australian government clearly stipulates that overseas people cannot buy second-hand houses, leisure farms that do not produce agricultural benefits.
Overseas people or organizations who have not yet obtained Australian permanent residency can buy farms, but most people on tourist or business visas can only stay in Australia for a maximum of three months at a time.
That is to say, you cannot stay in Australia indefinitely just because you bought a farm.
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It is a farm, even if it is close to the edge of the city, it is still empty and quiet, and loneliness is hard to bear.
The population density of New York City is 10,000 people per square kilometer and Australia is 3 people per square kilometer.
That is, if you walk on the streets of New York City for an hour, you will meet 13 people in a second, and you will have to walk for 20 minutes to meet someone in Australia.
Australia is vast and sparsely populated, with more than 85% of the population concentrated in central coastal cities 50 kilometers away from the coast. Not to mention rural farms, even in the suburbs, which are 30 kilometers away from the city center and less than an hour’s drive away, there will be fewer pedestrians and fewer vehicles in the evening.
For the international city dwellers who come from the crowds of people all day long, the silence and emptiness of an Australian farm are unimaginable. Especially at night, when only one’s own breath and soul are left in silence, it is difficult for people with too many distractions to enjoy the beauty of this silence.
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Farms are expensive?
For a variety of reasons, more and more people are turning their attention to Australian farms, especially from Asian countries.
There were 93,300 Australian farm households in 2011, and the average net worth (including assets and liabilities) of farmers in 2009-10 was AUD 1.3 million, or 1 million usd, much higher than the average net worth of other households in Australia (RMB 393,000) (* Note). Therefore, it is not an exaggeration to say that the farmer is an “aristocrat” in Australia.
The price of a lifestyle farm is related to size and location. The larger the farm plot, the farther from the city center or town center, the cheaper the price.
Australia’s economy is stable, and the real estate market has its own laws of development. It moves with the wind, and few speculative behaviors fluctuate. It is extremely unlikely that you will get a bargain and find a leak.
Many of the lifestyle farms here are a pursuit of being close to nature, a place to enjoy personal privacy, and a quiet leisure vacation, rather than being forced by life as a last resort. This dictates that lifestyle farms are often not cheaper than urban properties.
This kind of farm usually has no output, the sales cycle is longer than that of the property in the city, and the bank loan is relatively conservative. Generally, the maximum loan does not exceed 70%.
Therefore, if you want to buy a farm in Australia, an investment of less than 200,000 USD is often difficult to operate and stretched.
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Farms are expensive?
For a variety of reasons, more and more people are turning their attention to Australian farms, especially from Asian countries.
There were 93,300 Australian farm households in 2011, and the average net worth (including assets and liabilities) of farmers in 2009-10 was AUD 1.3 million, or 1 million usd, much higher than the average net worth of other households in Australia (RMB 393,000) (* Note). Therefore, it is not an exaggeration to say that the farmer is an “aristocrat” in Australia.
The price of a lifestyle farm is related to size and location. The larger the farm plot, the farther from the city center or town center, the cheaper the price.
Australia’s economy is stable, and the real estate market has its own laws of development. It moves with the wind, and few speculative behaviors fluctuate. It is extremely unlikely that you will get a bargain and find a leak.
Many of the lifestyle farms here are a pursuit of being close to nature, a place to enjoy personal privacy, and a quiet leisure vacation, rather than being forced by life as a last resort. This dictates that lifestyle farms are often not cheaper than urban properties.
This kind of farm usually has no output, the sales cycle is longer than that of the property in the city, and the bank loan is relatively conservative. Generally, the maximum loan does not exceed 70%.
Therefore, if you want to buy a farm in Australia, an investment of less than 350,000 USD is often difficult to operate and stretched.
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No matter how small a farm is, it means hard work
Congratulations, the farm is finally purchased, and the hard works begin.
If you choose to come to Australia to be a farmer, you must perform the basic duties of a farmer.
The duty of the farmer includes weeding and pruning, garden trimming, fence maintenance, animal quarantine, deworming and spraying, mowing and fertilizing, fire prevention and waterproofing, road dredging, water source protection, etc., all of which require physical labor.
Hiring helpers and looking for a housekeeper means that there is no or little income at the same time as there is an extra expense, and the wages are not low, which can easily lead to the situation of unprofitable and anti-discount.
I don’t work, or I don’t have the opportunity or time to take care of it. At the same time, in order not to spend hiring labor, someone asked me if I could buy a farm and left it there.
The answer is yes!
But the farm is disorganized, overgrown with weeds, and there is a fire hazard, which infringes on the interests of others, and the local municipality will intervene.
And a deserted farm decays faster than an empty dwelling. Abandoned for several years, the cost of restoration is much greater than the cost of annual maintenance.
Owning a farm is not just a labor, but a responsibility.
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