This week we begin a series looking at suburbs posting the highest capital growth for houses in the sub $600,000 market. This week we look at two affordable Sydney suburbs that have posted excellent capital growth in the past 12 months. This week we hear from Leon Cupit, from Independent Property Inspections, about what a property inspection covers and why having a one makes sense. And in this week’s tax tip we look at the difference between the contract exchange date and the settlement date when you buy or sell a property.
NewsIn the latest property news, economic forecaster BIS Shrapnel released its Long term Forecasts 2009 - 2024 report in which the company says it expects the year ahead to be the most difficult phase for the Australian economy, and forecast a solid recovery over 2011 - 2012 driven by housing construction. According to the Quartile Property Network, BIS says a combination of low interest rates, pent up demand, high rents and high rental yields will drive a strong phase of construction from 2010/2011, gaining strength over 2011 to 2013. And in a report on Sydney’s housing market released by Quartile Property Network, data shows Syndey is facing its deepest period of undersupply in 2009/2010 , with the rental vacancy rate for the month of May at just 1 per cent. However the report suggested that the next cyclical upturn in prices may be on the way soon with buying conditions at the best they have been since 1986.
Suburb in FocusThis week we are focusing on the sub $600,000 house market in capital cities around Australia and showing you which suburbs have recorded the strongest growth in the past 12 months. This price range is the most common investor and first home owner price bracket, which has been boosted in the last year by government grants. Rosehill is located about 20kms west of the Sydney CBD near Parramatta and has a famous racecourse. 49% of Rosehill’s residents are married while 34% are unmarried. Stand alone houses account for 60% of dwellings in the area with units accounting for another 28% of properties. Rental properties make up 41% of the housing market. The median house price in Rosehill is $455,000 dollars, which is 20.5% higher compared to a year ago. There were just 13 houses sold in Rosehill in the 12 months to June 30 and 37 were rented out. The median rent price for a house is $460 which brings the gross rental yield to 5.3%.
Fairfield East is about a 30km drive south west of Sydney’s CBD. It is generally a working class suburb. 77% of households contain families and the most common family type is couples with children. Stand alone houses account for almost 90% (89.7%) of dwellings in the area while units make up another 7%. Rental properties make up 35% of the housing market. Let’s look at the data. The median house price in Fairfield East is $352,000 dollars, which is an increase of 17.3% compared to a year ago. There were 45 houses sold in Fairfield East in the 12 months to June 30 and 19 rented out. The median rent price for a house is $340 which brings the gross rental yield to 5%.
Tax TipWe are looking at the difference between the date of contract exchange and the date of settlement and the different taxation triggers for each. The contract exchange, sometimes called when contracts ‘go unconditional’, is the date that you enter into a legal agreement to buy or sell the property while the settlement date usually occurs a couple of months after this contract exchange date. Now when you sell a property, the capital gains tax is triggered by the contract exchange date which means you will be eligible to pay capital gains tax in the financial year that you exchanged contracts, not when you received payment for the property. However when you buy a property, the settlement date is the official date when you take legal control of the property and this is the date that you can start claiming expenses from. If you are thinking of selling a property, it is a good idea to talk with your accountant or tax advisor because understanding these dates and designing the sale to minimize tax can sometimes save thousands of dollars.
