How to Buy a Home in Australia
Buying a home in Australia typically takes 4–15 months from the decision to search to the day you get keys. The process follows a broadly consistent sequence regardless of state: financial preparation → property search → offer or auction → legal process → settlement. This guide covers every stage with realistic timelines and the most common mistakes at each step.
Step 1: Set your budget and get pre-approval
Before you look at a single property, you need to know what you can actually borrow. Your borrowing capacity depends on your income, existing debts, living expenses, and the deposit you have available. Use a mortgage affordability calculator to get a ballpark, then speak to a lender or mortgage broker for a formal assessment.
Pre-approval (also called conditional approval) is a lender's written indication that they will lend you up to a certain amount, subject to satisfactory valuation and final checks. Getting pre-approval before you start searching is strongly recommended — most agents require it to take your offer seriously, and it clarifies your real budget before you fall in love with a property you cannot afford.
Pre-approval typically takes 1–2 weeks and is valid for 3 months. If your search runs longer than 3 months, you may need to renew it.
Step 2: Plan your deposit and upfront costs
The standard deposit target is 20% of the purchase price. At 20%, you avoid Lenders Mortgage Insurance (LMI) — a one-off insurance premium that protects the lender (not you) if you default. LMI can cost $5,000–$30,000+ on a typical purchase.
The First Home Guarantee scheme allows eligible first home buyers to purchase with 5% deposit and no LMI, with the government guaranteeing the remaining 15% to the lender. Income and purchase price caps apply — check the current thresholds on the NHFIC website.
On top of your deposit, budget for these upfront costs:
| Cost item | Typical range | Notes |
|---|---|---|
| Stamp duty | 0–5% of purchase price | Varies by state; many FHB exemptions apply |
| Conveyancer / solicitor | $800–$2,500 | Required for legal transfer |
| Building & pest inspection | $400–$700 | Per property inspected |
| Lender fees | $0–$600 | Application, valuation; varies by lender |
| Moving costs | $1,000–$5,000 | Depending on distance and volume |
Step 3: Search for the right property
Define your criteria before you start: target suburbs, property type (house, unit, townhouse), minimum bedrooms and bathrooms, and non-negotiables. Set up alerts on realestate.com.au and domain.com.au for new listings in your target areas.
Attend open homes even for properties you are not seriously considering. The first 5–10 open homes are calibration — you are learning what your budget buys, how different suburbs compare, and what compromises you are willing to make. Do this before you fall in love with anything.
Research comparable sales before making any offer. Look at sold prices in the last 60–90 days for similar properties on realestate.com.au/sold. Your offer should be anchored to this evidence, not to the asking price.
Step 4: Inspect properties properly
Always inspect with a checklist. Key red flags to identify yourself: damp patches or water staining on walls or ceilings, soft spots in floors (especially bathroom and laundry), cracks in external brickwork, signs of rising damp at the base of walls, mould in wet areas, and shower base flex when you step on it.
For any property you are seriously considering making an offer on, commission a professional building and pest inspection ($400–$700). This is separate from any inspection report the vendor may provide — do not rely on the vendor's report. Commission your own from an independent inspector.
If your offer includes a building and pest condition, the inspection happens after offer acceptance but before exchange. If the inspection reveals material problems, you can negotiate a price reduction, request rectification, or withdraw.
Step 5: Understand your sale method — auction or private treaty
Properties in Australia are sold by one of two methods: auction or private treaty (private sale). They carry very different risk profiles and buyer requirements.
Private treaty: You make a written offer with conditions (finance, building and pest, settlement terms). The vendor can accept, reject, or counter. Negotiation is sequential and private. A cooling-off period typically applies. Good for buyers who need conditional protection.
Auction: Unconditional contract — no cooling-off, no conditions. You must complete all due diligence (building inspection, legal review, finance confirmation) before auction day. All bidders must be registered. If bidding passes the vendor's reserve, the property sells unconditionally to the highest bidder. Good for buyers with solid pre-approval and no outstanding due diligence.
Step 6: Due diligence and legal review
Before you exchange contracts, engage a conveyancer or solicitor to review the contract of sale and conduct searches. Searches include: title search (confirms ownership and any encumbrances), council rates and land tax, planning overlays, easements, and strata/OC obligations if applicable.
In Victoria, the vendor must provide a Section 32 (Vendor's Statement) before any contract is signed. Review this carefully with your conveyancer — it discloses material facts about the property including building permits, council notices, and owners corporation obligations.
Allow 1–2 weeks for your conveyancer to review documents and advise. Do not sign under time pressure without having had the contract reviewed.
Step 7: Exchange contracts
Exchange is the moment both buyer and vendor sign identical copies of the contract of sale and the buyer pays the deposit — typically 10%, sometimes negotiated to 5%. At this point, the contract becomes legally binding on both parties (subject to any unfulfilled conditions).
If you have a finance condition, exchange triggers your formal loan application — your lender will order a valuation and process full approval. Finance conditions typically give you 14–21 days.
A cooling-off period begins at exchange in most states (not at auction). This gives you a limited window to withdraw, subject to a penalty — typically 0.2–0.25% of the purchase price.
Step 8: Settlement
Settlement is when the remaining purchase funds are transferred to the vendor and title changes to your name. It typically occurs 30–90 days after exchange, with 42 days being the most common.
In the lead-up to settlement, your lender arranges a final valuation, your conveyancer manages the fund transfer coordination, and you should conduct a final pre-settlement inspection (usually 1–2 days before) to confirm the property is in the condition agreed.
On settlement day: funds transfer, title registers in your name, and the agent releases the keys. You are now the owner.
First home buyer considerations
Several government schemes specifically target first home buyers. Eligibility varies by state and changes over time — always verify current thresholds with your state revenue office.
| Scheme | What it does | Key limit |
|---|---|---|
| First Home Owner Grant (FHOG) | One-off cash grant ($10k–$30k) | New builds only in most states |
| First Home Guarantee | 5% deposit with no LMI | Income and purchase price caps |
| Stamp duty concessions | Full or partial exemption | Price thresholds vary by state |
| First Home Super Saver | Withdraw up to $50k of super contributions for deposit | Only voluntary contributions; tax advantages apply |
Common delays and mistakes
- ✗Finance falling through after exchange — Have your finance condition solid and your income position unchanged before you exchange. A job change between pre-approval and formal approval is a common problem.
- ✗Underestimating upfront cash required — Add stamp duty, legal fees, inspection costs, and moving costs to your deposit. First home buyers often calculate the deposit and nothing else.
- ✗Buying at your absolute borrowing limit — A buffer of $50,000–$100,000 below your maximum provides protection against rate rises, income disruption, or unexpected repairs.
- ✗Skipping the building inspection — A $500 inspection can identify tens of thousands in defects. This is not optional for any serious purchase.
- ✗Overbidding at auction due to emotional pressure — Set your absolute limit before auction day and do not revise it on the day. Write it down. Tell your partner.
- ✗Missing settlement — If settlement is delayed due to your side, the vendor may charge penalty interest. Ensure funds are cleared in advance and your conveyancer is briefed well before settlement day.
Realistic timeline: from decision to keys
Most buyers significantly underestimate how long the process takes. The search phase is the biggest variable — in competitive markets, buyers commonly take 6–12 months to find a property and have an offer accepted.
Use the Mortgage Affordability Calculator to establish your borrowing capacity, the Deposit Calculator to understand how long you need to save, and the Stamp Duty Calculator to get an accurate upfront cost figure before your first open home.