IntroThis week we are continuing a series looking at affordable unit markets that are experiencing high growth and solid rental yields. This week’s focus is Melbourne.
NewsRenters are being told to expect increases this year with rising interest rates and land tax costs on landlords set to be passed on. That’s the message from Australian Property Monitors, which also said in its December Quarterly Rental Report that 2009 was the weakest year for national rental growth since 2002.
The Australian Bureau of Statistics' latest housing finance data is out for November, showing approvals fell a seasonally adjusted 5.6% in the month from October. Meanwhile... activity in Australia's construction sector contracted in December but at a slower pace than the month before.
A report by the Australian Industry Group/Housing Industry Association found that the Performance of Construction Index rose 1.7 points to 49.3 points in December from November - seasonally adjusted.
Suburb in FocusIn our suburb in focus section each week, we look at property markets around Australia that could be of interest to property investors. We have compiled a list of affordable unit markets in all the capital cities around Australia that are experiencing high growth and solid rental yields. Both suburbs this week have shown strong gains in the last couple of years.
This week the focus is Melbourne and we’re looking at the unit market in Strathmore but first up is Kingsville which is located about 9kms west from Melbourne’s CBD.
Its population was close to 3,500 in the last census. Kingsville is a small suburb nestled primarily between West Footscray and Yarraville and is often considered to be a part of one or the other. Close to 60% of Kingsville’s residents were Australian born and English is spoken in around 63% of homes. 35% of properties in the suburb are rental properties. Approximately 61% of dwellings are houses, 32% are units and another 7% are semis. The suburb’s population includes clerical and administrative workers as well as managers and trades and technicians.
The median unit price in Kingsville is $285,500 which is an increase of over 14% compared to a year ago. In 2008 growth was even stronger at nearly 31%. There were 22 units sold in Kingsville in the 12 months to November 30. The median rental price is $240 bringing the gross rental yield to 4.37%.
Now to the unit market in Strathmore which is located about an 11 km drive north-west of Melbourne’s CBD. Strathmore’s population in 2006 was over 7,500 people. Over 80% of Strathmore’s residents were Australian born. 82% of homes are English speaking with a small percentage of homes in the suburb speak Italian or Greek at home. Close to 14% of dwellings are rental properties. Houses make up 88% of properties, 4% are units and close to another 8% are semis.
The median unit price in Strathmore is higher than Kingsville at $395,000 dollars, which is a 13.7% jump compared to a year ago. In 2008 the median unit price increased 15.8%. There have been 11 units sold in the last 12 months. The median rent price for a unit in the suburb is $340 which brings the gross rental yield to 4.48%.
Tax TipNow to the investment property Tax Tip of the week from Depreciator, Tax Depreciation Schedule specialists. This week we look at whether the cost of tree removal can be claimed.If a tree is removed simply because you don’t want it there, or even because it may cause damage in the future, then you can’t claim the cost as a deduction. If the tree is damaged or must be removed for safety reasons, you can claim the cost. Tree removal is also claimable if the roots are interfering with pipes or the foundations - but only if the problem was not apparent when you purchased the property. Be sure to consult your local council before removing any tree. And remember, this is general information only. For specific advice, consult your accountant or tax adviser.