This week we continue our series looking at looking at council areas with the greatest increase in hold periods over the last five years, with a focus on two council areas in Western Australia. In our tax tip we look at negative gearing and how it can reduce your tax payable or give you a larger tax refund.
News
The Housing Industry Association says while the ration of house prices to income has rise over the last 10 years, it has eased to below pre-GFC levels. HIA says Australia continues to run annual deficits between the underlying demand for dwellings and the completion of dwellings, so in the long-term, Australia’s housing market is underpinned by insufficient supply and robust demand. HIA says the Government needs to address the supply side issues so that Australia does not have a housing affordability problem.
Suburb in Focus This week we continue our series looking at looking at council areas with the greatest increase in hold periods over the last five years, with a focus on two council areas in Western Australia. A hold period represents the time between when a property is bought and sold, and can be an indication of the appreciation rates and desirability of the area.
First let’s look at Murray, a council area located around 170 kilometers south of Perth. With a population of 11,969 in the last census, the Shire of Murray is defined by the Murray river of Western Australian, not the more famous river of the same name in the east. Flowing from the Dwellingup hills, through the heritage town of Pinjarra and into the Peel Harvey Estuary. Pinjarra is the central town in the area and one of the oldest in the state, while neighboring city Mandurah is the second largest in the state, having grown from a holiday destination into a major regional centre. Murray shire residents enjoy a largely rural lifestyle, with roads and railways offering easy access to the rest of the state. As well as, a route for visitors to travel to enjoy Murray’s natural landscape, sample local wineries, or a range of outdoor activities such as bushwalking, fishing and canoeing.
According to figures from RP Data, houses in Murray recorded the largest increase in hold periods in Western Australia for the five years to 2010. Last year the average hold period was 8.1 years, up from 4.6 years in 2005. The median price of a house in Murray soared 90.7 per cent in the five year period, to $398,000 in 2010.
Our next council area is Bassendean, located around 10 kilometers north east of Perth’s central business district. With a population of 13,463 in the last census, the tranquil town of Bassendean reaches from Eden Hill in the north to Ashfield in the south. The Swan River flows along the bounds of the council area, providing residents with a destination for outdoor activities within the surrounding parks and reserves. In fact the town boasts 56 areas of local open space with a combined area of 63 hectares, and an extra 85 hectares of regional open space. Bassendean properties generally offer more land than inner city spaces. Residents well and truly enjoy suburban life equipped with shops and services, while only a 15 minute drive into Perth’s CBD. Or, catching a train ride will get you there even faster by hopping on at the railway line that runs conveniently through Bassendean’s centre.
Taking a look at the figures, the hold period for houses in Bassendean was 8.4 years in 2010, up from 5.7 years in 2005. The median price of a house in Bassendean lifted 69.2 per cent in the five year period, to $431,500 in 2010.
Tax Tip And now to the Tax Tip of the week from Depreciator - the Tax Depreciation Schedule specialists.
Negative gearing is a term used when talking about interest costs and depreciation but it includes all the rental deductions. A rental property is negatively geared when it is bought with the help of borrowed funds and its expenses exceed the rental income and a loss incurred. Losses incurred can be offset against other assessable income such as salary, wages or business income. This enables a reduction in tax payable or a larger tax refund. The largest part of the deduction is the interest portion of the mortgage. However, you can claim property management fees, rates, loan costs and maintenance and repairs.
As always, do remember to consult with a tax accountant or tax professional before making any tax related decisions.
