We’re continuing our look at house and unit markets with the lowest days on market this week focusing on South Australia.
And in our tax tip we look at whether you can claim the cost of transporting furniture to an investment property.But first, let’s catch up on this week’s property news with Elizabeth Tilley.
NewsIn property news, the rising cost of residential land in Australia continues to threaten a recovery in home building.
The latest residential land report from the Housing Industry Association and RP Data shows the median price of a vacant housing block increased by 2.2% in the December quarter to $185,222.
Over the year to December 2009, the weighted median residential land price jumped 14% - the fastest annual rate since mid-2004.
Sydney has the most expensive median land price, at $275,000, with the cheapest market in the northern region of South Australia.
Meanwhile, the volume of land sales fell substantially in the December quarter. Land sales were down 4.6% compared to the same period the year before. Demand for housing construction is also slowing. The latest Australian Industry Group/HIA Performance of Construction Index reveals home building was flat in March following eight straight months of expansion. On a more positive note, BIS Shrapnel expects first home buyers to be lured back into the market in the second half of 2010 as the rental market tightens.
Suburb in FocusIn our suburb in focus section, we are taking a look at two South Australian suburbs with the lowest days on market. Both suburbs this week are located east of Adelaide.
First up, the house market in the suburb of Maylands. Located approximately 4.7 kilometres north-east of Adelaide’s CBD.Maylands is bounded by Portrush Road and Magill Road. The suburb’s population in the last census was 1,410. Many of the houses in Maylands were built in the late 1800’s and early 1900’s and as such there are many examples of South Australian colonial, federation and some art deco architecture. The dwellings in the suburb are generally larger than its surrounding suburbs, with some remaining homes attached to small market gardens. Some heritage preservation has occurred in Maylands. The suburb is also known for its antique stores along Magill Road.For the 12 months to December 2009 Maylands recorded a median house price of $600,000. There were 18 homes sold in the area, with the median price rising 22.4% for the year. The median advertised weekly rent was $337.5 with a gross rental yield of 2.9%. Houses on average spent around 68 days on the market.
And now to our second suburb Norwood and the unit market. Norwood is around 3.5 kilometres east of the Adelaide CBD. The suburb’s population in the 2006 census was 5,704. Norwood is a leafy suburb with many of the streets lined with plane trees and older houses, though in recent years there has been more higher density development. The suburb was previously a working class suburb and attracted many European migrants. Today it still has a high population of people with Italian background which is reflected in the restaurants and fashion boutiques that line the Parade. Norwood is now quite a sought after suburb to live-in.Turning to the figures, the median unit price in Norwood is $334,000 with 69 units sold in the 12 months to December 2009. The median growth rate for units in the suburb during the 12 month period was 2.8%. The advertised weekly rent was $250 taking the gross rental yield to 3.9%. A unit in the suburb of Norwood spent an average 52 days on the market in 2009.
Tax TipAnd now to the Tax Tip of the week from Depreciator. Tax Depreciation Schedule specialists.
This week we have had a question from a viewer who bought furniture to put into a new investment property and would like to know how to claim the cost of transporting the furniture.
The ATO requires you include transportation costs in the value of the furniture and then depreciate the whole cost - the same way that you would depreciate the furniture items. This means that you cannot claim a full deduction for the transport cost - it needs to be depreciated. The transport costs would be apportioned across the items.
This is because the transportation cost is not considered to be a cost incurred in deriving rental income, but rather they form part of establishing the income producing asset.
Of course, you should always check with your accountant or tax professional before making tax related decisions that apply to your specific situation.
