NewsThe number of home loans taken out for investment rose in March, adding weight to the view that rising property prices are partly being driven higher by investors.The Bureau of Statistics says fixed investment home loans increased 3% seasonally adjusted in March.However not surprisingly, the number of owner occupied home loans fell 3.4% in March after a 1.8% fall in February - marking the sixth monthly decline in a row, in line with rising interest rates and a shortage of housing. The total value for all home loans eased 1.4% to around $20 billion last month.
In its latest Statement of Monetary Policy, the RBA said, ''the divergence between aggregate national loan approvals and housing prices remains something of a puzzle.” The RBA has also speculated that more up-graders are buying without the need for loans.
Suburb in FocusIn our suburb in focus section, we are looking at capital city unit markets with a minimum 50 units for sale and a median price between $350,000 and $450,000. This week we start in Sydney, NSW.First up is the unit market in the suburb of Ultimo - 2 kilometres south-west of Sydney’s CBD.An inner-city suburb with a population of around 5,550 at the last census, Ultimo has an industrial history with a number of factories and warehouses developed in the early 20th century due to the suburbs proximity to Darling Harbour. In the 1980’s these derelict industrial sites began to be redeveloped into residential use, mainly apartments, which still continues today. Ultimo has some of the oldest examples of Victorian terraced houses in Australia. The suburb is also home to the main campus of the University of Technology, and the Sydney Institute of TAFE.Turning to the figures, the median unit price in Ultimo for the 12 months to March 2010 was $448,250 with an average rental yield for a unit of 5.6%. Ultimo currently has 83 units on the market.And now to our second suburb, the unit market in the seaside suburb of Cronulla, 30 kilometres south of Sydney’s CBD. The suburb’s population in the 2006 census was 16,754. Cronulla is situated on a peninsula framed by Botany Bay to the north, Port Hacking to the south and Gunnamatta Bay to the west. Cronulla is a popular tourist destination famed for its beaches. Shark Island, just offshore is a famous surfing and body boarding spot.Looking at the figures now. The median unit price in Cronulla for the 12 months to March 2010, came to $420,000 with units in the suburb posting and average rental yield of 4.5%. There are 76 units currently for sale.
Tax TipAnd now to the Tax Tip of the week from Depreciator. Tax Depreciation Schedule specialists.Generally, an investment property needs to be ‘available for rent’ for you to be able to claim tax deductions against it. However, if you are a property investor building or renovating your investment property last financial year and didn’t receive any rental income, you can still claim all the normal costs like interest, rates, insurances.This applies so long as you don’t use the property for personal use during the time it is unoccupied. So even if you build an investment property and that takes a year, you can claim expenses the whole time - as long as your intention remains for it to be an investment. It would be wise to have some proof that you were always intending to rent out the property - perhaps the appointment of a property manager before the place is built.As always discuss these things with your accountant.
