IMF sounds alarm on Australia’s rising house prices
The International Monetary Fund (IMF) is calling on Australian regulators to rein in the housing boom, citing risks to t...
The start of the new financial year has seen a major improvement in property investment lending throughout Australia.
Blogger: Paul Bennion, Managing Director, DEPPRO tax depreciation specialists
This trend is underlined by the latest figures produced by the ABS showing that the fortunes of the property investment market have significantly improved over recent months with investment home loans jumping on a monthly basis by $1.8 billion during the past year.
The latest ABS data reveal that during July 2013, home loans valued at $8.08 billion were secured by property investors to purchase established homes.
This compared to home loans valued at $6.26 billion during July 2012. Lending to property investors has steadily increased during 2013 from a low of just $5.58 billion which was recorded in January.
2013/2014 is shaping up to be one of the most positive financial years for the property investment market in Australia during recent times.
Overall, we are now living in an environment of low interest rates and property investors can look with some confidence to very competitive borrowing costs during 2013/2014.
These very low interest rates, combined with high rental returns, means that property will again emerge as a blue chip investment choice for many Australians.
In a growing number of capital cities in Australia, rental returns are now well above 5% and even higher rates of returns can be achieved in regional cities which are linked with the resources sector.
During the last six months, DEPPRO has recorded the emergence of a growing number of new first time property investors who have not bought an investment property before.
These first time new investors are now a major factor in the current upswing in property investment lending highlighted by the latest ABS figures.
However, one of the most common mistakes that first time investors make is not to claim their full tax depreciation benefits associated with owning an investment property.
Many of these first time property investors fail to understand that the tax benefits from depreciation can be just as important as rental income and that tax benefits obtained through depreciation can be equivalent to 60% of the total purchase price of the property.
A large proportion of these tax benefits are never claimed which means that each year hundreds of millions of dollars in tax benefits are lost by investors not claiming their legitimate entitlements.
Property investors can fully maximize these depreciation benefits by obtaining a depreciation report of their investment property from a member of the The Australian Institute of Quantity Surveyors (AIQS).