The latest home lending figures show that property investors as well as owner occupiers are now locking into fixed home loan rates in near record numbers.
Blogger: Paul Bennion, DEPPRO tax depreciation specialists
ABS figures for April 2013 show that 20.6% or around one in four home loans in Australia were fixed and this was the highest proportion of loans that were fixed in Australia for five years.
The ABS figures show that during April 2013, fixed loans were used by property buyers to purchase some 10,040 dwellings in Australia.
This compared to just 5,880 dwellings purchased using fixed home loans during April 2012. With three year fixed rates now between 4% and 5%, many investors are now deciding to lock in their interest rates.
The outlook for the Australian property investment market during the coming financial year is very positive with interest rates now expected to remain low for an extended period of time.
Since the start of July 2013, DEPPRO has already recorded a 20% jump in tax depreciation schedules which we undertake for clients.
A significant new trend is the fact that a large proportion of these tax depreciation schedules have been undertaken for new clients who have just purchased their very first investment property.
This is a major vote of confidence in the property investment market and indicates that in tandem with an increase in first home buyers, there has also been a jump in first time property investors in the Australian real estate market.
Historically, when first time property investors purchase one investment property, they subsequently purchase additional properties. Therefore, this surge in first time property investors should have a long term ripple effect throughout the real estate market for a number of years.
DEPPRO is finding that these first time property investors are now very well educated and unlike first time property investors a decade ago, they understand the substantial benefits associated with tax depreciation.
These first time property investors have typically studied numerous property investor magazines and attended seminars which have outlined the fact that tax depreciations benefits can be equivalent to 60% of the total purchase price of the property.