NewsIn property news, the RBA has decided to leave rates on hold for the second consecutive month at 4.5%. The Housing Industry Association says the central bank’s decision is appropriate given clear signs that past rate rises are denting demand and confidence.Through to May this year the RBA raised interest rates six times in eight months. And according to a report in The Australian, tougher funding conditions are putting pressure on banks margins. The paper says this rising pressure may prompt rate hikes independent of any RBA move
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 Brisbane. First up we take a look at the house market in the suburb of St Lucia, 5.7 kilometres south west of Brisbane’s CBD.St Lucia is home to the main campus of the University of Queensland and is considered a prestigious inner suburb of Brisbane. The suburb’s population in the last census was 10,612. The university is the main focus of the suburb with a high population of students residing in dwellings surrounding the campus. It is also considered a well off suburb, home to wealthy professionals and families. The suburb is situated on the Brisbane River with homes in close proximity to the river attracting price tags in the millions of dollars. St Lucia is serviced by buses which terminate at the university and ferry with the CityCat stopping at two terminals in St Lucia.Turning to the figures, the median house price in St Lucia for the year to March 2010 was $775,000 with house prices up 16.5%. The median weekly rent for a house was $550 with an average rental yield of 3.7%. 97 houses were sold in St Lucia during the 12 months to March 2010, currently there are around 43 houses on the market.And now to our second suburb, the unit market in Kelvin Grove located 3 kilometres north of Brisbane’s CBD. Kelvin Grove is home to a campus of the Queensland University of Technology and La Boite Theatre, QLD’s second largest theatre company. The suburb’s population in the 2006 census was 4,246. Kelvin Grove is an inner northern suburb. A hilly suburb, Kelvin Grove has a mix of traditional ‘Queenslander’ style dwellings and more modern apartment blocks. The suburb is serviced by compressed natural gas buses operated by the Brisbane City Council.Looking at the figures now, the median unit price in Kelvin Grove for the year to March 2010 was $431,000 with unit prices up 8% for the 12 months. The median weekly rent for a unit in the suburb was $350 with an average rental yield of 4.2%. 144 units were sold in Kelvin Grove during the 12 months to March 2010, currently there are 46 units on the market.
Tax TipAnd now to the Tax Tip of the week from Depreciator. Tax Depreciation Schedule specialists.We have heard again recently that the ATO are going to be looking closely at claims for repairs to investment properties this year. So be careful. Remember, a repair means to restore something to the condition it was in when you bought it. A common error made by property investors is incorrectly claiming repairs done straight after you bought it and before tenants moved in. In this case, you are ‘improving’ the property and you will have to depreciate the cost of that work.This is the case even if the repairs were essential. You need to get this right, because it is an easy one for the ATO to check. Best to ask your accountant and claim correctly.
