Introduction:
This week we begin our new series looking at suburbs with the most affordable median prices in 2010, with a focus on two suburbs in South Australia. We speak with Mortgage Choice CEO, Michael Russell about mortgage exit fees. In our tax tip we look at investing in overseas property.
News:
A report on Australian property sales has shown 2010 was a sluggish year, with sales volumes dipping by 20 per cent. Of all the capital cities, RPData reports Darwin’s sales volumes dropped the most, down 30.3 per cent over the year, while Sydney lodged the smallest losses with property sales easing just 11.4 per cent. RPData says that while the Australian economy has improved since the Global Financial Crisis, the housing market is constrained by affordability issues, with fewer first home buyers and investors contributing to low sales volumes. As for what property continues to be popular, houses remained the most sought after dwellings in 2010, making up 68 per cent of sales in capital cities with the remaining 32 per cent made up of units. Outside of capital cities, houses accounted for 79 per cent of sales. Over last year there were 266,070 sales of houses and units within the combined capital city markets and 404,847 sales across the nation, both figures the lowest in a decade.
Suburb in Focus
This week we continue our series looking at suburbs with the most affordable median prices in 2010, with a focus on two suburbs in South Australia.
First let’s look at Elizabeth North, a suburb located 31 kilometres north of Adelaide’s central business district. With a population of 2,883 in the 2006 census, the suburb is bordered by Winterslow Road to the south and Womma Road in the north, but also includes the area extending into Elizabeth Downs along Main North Road. The suburb also includes the area sometimes referred to as Elizabeth West. Womma train station within the suburb and Elizabeth train station just to the south-west service the area as well as buses along Woodford Road. The area is primarily three bedroom family homes and villas, many of them recently built. House and land packages are available for sale. There is the small Rosewood Shopping Centre strip. The much larger Elizabeth Shopping Centre and Elizabeth City Centre are just to the south of the suburb. The Edinburgh RAAF base and the Defence Science and Technology Organisation, whilst not part of the suburb, border it.
Turning to the figures, houses in Elizabeth North recorded the capital’s most affordable median price in 2010 of $204,000. 42 properties were sold in the year.
Our next suburb is Davoren Park, neighbouring Elizabeth North, it is located 32 kilometres north of Adelaide’s CBD.
With a population of 6,782 in the last census, the suburb is also full of three bedroom brick houses, but many of them older rather than newly built. There are also blocks of vacant land ready for development. Colloquially known as the Peachey Belt, Peachey Road runs through the middle of the suburb. Playford City Council and the State Government are currently focusing on the area as part of a ten year project to expand and upgrade Smithfield Plains and Davoren Park. The Council has committed up to $23 million to the project. The Council expects the population to increase from 13,000 to 30,000 over the ten year period, with more than 4,000 new homes to be built. The money will fund improved community facilities including schools and training facilities, shopping, health and welfare. The suburb is serviced by Broadmeadows train station and Womma station in Elizabeth North. The train line runs along the eastern border of the suburb.
Turning to the figures, houses in Davoren Park recorded the capital’s second most affordable median price in 2010 of $205,000. 106 properties were sold in the year.
Interview
This week we speak with Mortgage Choice CEO, Michael Russell about mortgage exit fees.
Tax Tip
And now to the Tax Tip of the week from Depreciator - the Tax Depreciation Schedule specialists. When investing in overseas property there’s a range of local taxation issues that should be taken into account. Firstly, if you have earned an income from an overseas property, you must include that amount in your assessable income and declare it in your Australian income tax return. If you receive payments in the form of goods and services, the monetary value needs to be declared. If foreign tax has been paid on that income, you may be entitled to an Australian foreign income tax offset, providing relief from being taxed twice.
Secondly, as an Australian resident you are generally taxed on any capital gains made on an overseas property. The amount must be declared in your Australian tax return. Once again, you may be entitled to a foreign income tax offset. All your foreign income, deductions and foreign tax paid must be converted into Australian dollars.
As always, do remember to consult with a tax accountant or tax professional before making any tax related decisions.
