We’re continuing our look at house and unit markets with the lowest days on market this week focusing on two suburbs in Tasmania.
And in our tax tip we’ll look at ‘interest only’ loans for rental property and why this is popular.
NewsGrowth in house prices appears to be slowing.The latest report from Australian Property Monitors shows that in the March quarter, the rate of growth for the median house price rose just 3.1% across all capital cities except for Adelaide and Darwin, compared to 4.8% in December 2009.But annually the growth rate for the median house price is up by 16.2% for the year to March. That’s a six year high and been driven by prices in Sydney and Melbourne.Housing finance data has now been falling for five months and if that trend holds, house price growth is expected to moderate further in the year.Countering this are supply and demand factors, strong population growth, rising incomes, falling unemployment and very strong consumer and business sentiment. The National Housing Supply Council has also released new figures showing that the nation’s housing shortage increased to 178,400 homes in the 12 months to June of last year – that’s double what it was the previous corresponding period when it stood at 99,500 homes.
Suburb in FocusIn our suburb in focus section, we are taking a look at two Tasmanian suburbs with the lowest days on market.
First up, the house market in the suburb of West Hobart - located just 1.6 kilometres from the heart of Hobart.West Hobart is an inner city suburb of Hobart located in the hills west of the city centre. The suburb’s population in the last census was 5,525. The suburb was considered a working class suburb up until the 1960’s and since then has grown in popularity becoming quite a sought after location to live. Many of the houses in the area are older federation era buildings, popular because of their views of the Derwent River. Home to many musicians and artists it is now considered a bohemian.For the 12 months to December 2009 West Hobart recorded a median house price of $415,000. There were 97 homes sold in the area, with the median price rising 2.5% for the year. The median advertised weekly rent was $340 with a gross rental yield of 4.3%. Houses on average spent around 62 days on the market.
And now to our second suburb, and we’re taking a look at the unit market in South Launceston located about a 4 minute drive from the heart of Launceston and around 197 kilometres north of Hobart’s CBD. The suburb’s population in the 2006 census was 4,260. South Launceston includes the suburbs of Glen Dhu and Sandhill. Launceston is the second largest in Tasmania after Hobart and is one of Australia’s oldest cities, home to many nineteenth century buildings. Built around the Tamar River, the city has a cool temperature climate with four distinct seasons.Turning to the figures, the median unit price in South Launceston is $175,250 with 24 units sold in the 12 months to December 2009. The median growth rate for units in the suburb during the 12 month period was a big 16.8%. The advertised weekly rent was $150 taking the gross rental yield to 4.5%. A unit in the suburb of South Launceston spent an average 44 days on the market in 2009.
Tax TipAnd now to the Tax Tip of the week from Depreciator. Tax Depreciation Schedule specialists.
Today we’ll look at ‘interest only’ loans for rental property and why this popular. Interest payments on rental property are deductible. Where the interest and other expenses are greater than the rent, the property is said to be negatively geared. These losses can be offset against other income-including wages and salary. So from a tax minimisation perspective negatively geared property with interest only loans are popular.When applying for a loan this should be a consideration, along with the flexibility to move from principal and interest, to interest only (and back again) if you choose.
You should of course always check with your accountant or tax professional.
