NewsCracks are starting to appear in the Australian housing development market as new figures show that building approvals fell further in May. The Housing Industry Association’s Chief Economist, Dr Harley Dale, says progressively higher interest rates together with supply constraints have weighed heavily on the new home building industry. Australian building approvals fell 6.6 per cent to 13,412 units in May, seasonally adjusted. The number of seasonally adjusted residential dwelling approvals fell in five out of six states.
To put that into perspective, around the country, approvals fell by 9.8% in New South Wales, 3% in Victoria, 8.6% in Queensland, 13.9% in Western Australia, 24.6% in Tasmania, and by 1.1 per cent in trend terms in the Northern Territory. Increases were however recorded in South Australia where they rose 30.6% and were up by 3.7% in trend terms in the Australian Capital Territory.
Suburb in FocusIn our suburb in focus section, we continue a series looking at suburbs that have a University. This week we focus on two suburbs in Sydney.First up we take a look at the house market in the suburb of Westmead, 25.5 kilometres west of Sydney’s CBD.Westmead is home to a campus of the UWS and a proposed development of the UWS site by Lend Lease Development valued at $300M over 5 years. The vision for the development is to establish a diverse range of activities on the site that will enhance and support the wider Westmead Precinct’s role as a specialist medical hub and create a vibrant civic centre. The suburb’s population in the last census was 9,482. Westmead is serviced by rail and bus with the Westmead railweay station falling on the yellow Western railway line of the City Rail network. Health is a major employer in the area with the suburb home to the Westmead Medical Research Foundation, Westmead Hospital, Royal Alexander Hospital for Children and the Westmead Millennium Institute for Medical Research to name a few.Turning to the figures, the median house price in Westmead for the year to March 2010 was $495,000 with house prices growing 12.5% during the 12 month period. The median weekly rent for a house in the suburb was $383 with an average rental yield of 4%. 71 houses were sold in Westmead during the 12 months to March 2010, currently there are around 28 houses on the market.And now to our second suburb, the unit market in Kensington located 5.4 kilometres south, east of Sydney’s CBD. Kensington is home to the main campus of the University of NSW and NIDA, the National Institute of Dramatic Art. The suburb’s population in the 2006 census was 10,849. Kensington is also home to the exclusive Australian Golf Club. There is a mixture of high and medium density housing, and freestanding homes in Kensington. The suburb is next to the Randwick Racecourse and Centennial Park. It has a shopping strip that runs nearly the length of Anzac Parade into Kingsford and has a number of café’s and restaurants. It is serviced by buses that run along Anzac Parade.Looking at the figures now, the median unit price in Kensington for the year to March 2010 was $520,000 with unit prices up 6.2% for the 12 months. The median weekly rent for a unit in the suburb was $443 with an average rental yield of 4.4%. 277 units were sold in Kensington during the 12 months to March 2010, currently there are 75 units on the market.
Tax TipAnd now to the Tax Tip of the week from Depreciator. Tax Depreciation Schedule specialists.Let’s say you decide to turn your home into an investment property. A first requirement of the ATO is to ascertain the market value of the property at this time. Any future capital gain will be worked out from the market value at the time you turned the property into a rental property so it is important to get right. This is where the services of a professional valuer will be required rather than relying on a real estate agent’s appraisal. Also, if you live in your principle place of residence and lease out bedrooms within your house, you are effectively turning part of the property into an investment property. This could lead to capital gain liabilities down the track. The important thing is to keep good records and do your research upfront so that you don’t get any nasty tax surprises down the track. Remember, this is not intended as advice and you should always consult a tax professional before making decisions.
