This week we continue a series looking at capital city suburbs with the highest rental growth for units in Australia, starting with a look at Perth and Darwin. And in our tax tip we look at claiming travel expenses for tax deductions.
NewsMany economists believe that while Australian house prices are overvalued, positive economic factors mean the housing market is not in a bubble. In the absence of much higher interest rates, higher unemployment, and an increase in the supply of land in and around capital cities, it is unlikely house prices will fall sharply. This last fact has been borne out by recent figures from the Urban Development Association of Australia with vacant land prices in the metropolitan areas up 1 per cent over the last three months and 3.2 per cent for the year. Property research data from economic forecaster, BIS Shrapnel predicts pent-up demand will see more new houses in coming on to the market in Perth. The forecaster predicts the average number of new properties will be around 10,366 in the next four years, representing a 19 per cent increase over the last four years.
Suburbs in Focus This week we continue a series looking at capital city suburbs with the highest rental growth for units in Australia starting with a look at one suburb in Perth and one in Darwin.
First let’s look at the unit market in East Fremantle, Perth, a port city in Western Australia located 19 kilometers south-west of Perth. The city is at the mouth of the Swan river and is more commonly known as East Freo. According to figures from RP Data, East Fremantle recorded the largest increase in unit rents in Western Australia for the year to 30 June, rising 18.6 per cent from $295 per week last year, to $350 per week in 2010. With a population of 6,697 in the last census, East Fremantle is a part of the City of Fremantle, a coastal port city bounded by the Indian Ocean and the Swan River. The area has a significant cultural and architectural heritage. The area also has a big music and arts scene and is host to a number of festivals, café’s, restaurants, retail stores and markets. The area also has museums, art centers, parks and clean beaches. Turning to the figures for the year to 30 June 2010. Rents in East Fremantle rose 18.6 per cent to $350 per week from $295 per week in 2009. Over the same period 62 rentals were advertised. The median price of a unit in East Fremantle is $530,000.
Our next suburb is the unit market in Millner, Darwin located in Northern Territory, a ten minute drive north of Darwin’s central business district. Millner is considered one of the major growth areas of the northern suburbs. RP Data figures reveal that the median rental for units in Millner increased by 14.3 per cent last year, from $350 per week to $400 per week for the year ended on 30 June 2010. With a population of 2,617 in the last census, Millner is an upcoming area and is centrally located as it is between three main arterial roads. The area is close to the CBD, the airport, recreational parks and sporting venues. Millner is also home to Homemaker Village, the second largest shopping centre in the Northern Territory, boasting over 100 specialty shops. In addition to the shopping, Miller also boasts attractions such as Nightcliff and Rapid Creek Markets, the jetty and the beach. Taking a look at the figures, rents for units in Millner rose 14.3 per cent, from $350 per week in 2009, to $400 per week in the year to 30 June. Over the same period, 39 properties were advertised. The median price of a unit in Millner is $276,000.
Tax TipNow to the Tax Tip of the week from Depreciator, the Tax Depreciation Schedule specialists - This week we look at claiming travel expenses. You can claim a deduction for the cost of travel to inspect your rental property. The expenses you claim however not only include transportation costs but also include cost of meals and accommodation if your property is a long distance away.
Deductible travel expensesTravel expenses that are deductible include car running costs and depreciation; preparing the property for new tenants, collecting rent, inspecting the property and maintaining or repairing the property.
Non-deductible travel expensesTravel expenses that are not deductible include travelling expenses to inspect potential properties to purchase and travelling expenses to purchase a property. Whilst these are not tax deductible, they may form part of the cost base of the property. If you have a property interstate, it does not mean you can write-off your holidays. Travel expenses for tax purposes must be reasonable. This means you can’t go for 10 days to inspect your property. However, if you went to inspect your property once a year for two days, it may be deductible. Travelling interstate to your property three times a year is unlikely to be fully deductible.
