Beyond a Million Dollars

At the end of the financial year, Melbourne’s buoyant property market broke the $700,000 median price ceiling for the city for the first time ever. The REIV reported a metro Melbourne median house price of $706,000 and apartment price of $545,500.

Locally Murrumbeena, Carnegie, Ormond, Caulfield, McKinnon and Bentleigh are
now beyond the million-dollar mark for median house prices. The strength of the current market is a culmination of factors - a record number of auction sales in the first half of the year, low levels of stock on market, high levels of migration and record low interest rates.

Just in the first week of September, we sold a one bedroom flat for a record
price of $406,500 in Tranmere Avenue, Carnegie. For this investor it was a capital gain of $141,500 in just eight years! Despite these dizzy heights there are still good buying opportunities to be had. The REIV points directly to Carnegie/Murrumbeena, which
delivered a median of $292,500 for the smaller one bedroom apartments, as one of the areas that bargains can still be uncovered. Good value does exist amongst some of the older apartments as new apartment developments keep the supply of stock in the area high.
This is illustrated quite markedly in the median price review below when you compare the growth of houses verses units in Carnegie and Murrumbeena. As an investor or first home buyer you may wish to consider buying an older apartment and investing in a renovation.

Thomson have been proud supporters of The Alfred, since 2010. This year we are joining in the effort to raise money for the Alfred Healthy Heroes Father’s Day Appeal to help expand and improve The Alfred’s Cardiac Centre.

We sincerely thank those of our clients who have donated to this worthy cause.

Did you know that cardiac disease takes the life of an Australian every 12 minutes? For more information or to donate please visit: alfredfoundation.org.au

Rent Report

Rather than talk about tax next May or June, we thought we would bring it to top of mind now so you can plan and be mindful throughout the rest of the financial year.

Every dollar you can claim on an investment property will benefit your financial position. The Australian Tax Office has recently introduced a series of online videos aimed at helping landlords understand their tax obligations and provides information on possible tax deductions. Here are five areas to consider when maximising your tax savings
on a negatively geared investment.
Also visit: www.ato.gov.au/General/Property/In-detail/Rental-properties/ Rental-Property-video-series

1. Interest – provided your property is available for rent, the interest incurred on money you have borrowed for the property is tax-deductable. This includes not only the purchase, but borrowed funds used to undertake repairs or spent in dealing with tenant related issues.

2. Tenancy Costs – these include such things as internet marketing fees, agents letting fees, landlord insurance, legal costs to evict a tenant as well as travelling to inspect the property.

3. Repairs and Maintenance – the cost of restoring something to its original condition due to tenant wear and tear is tax-deductable. Example might be fixing a leaking tap,
repairing damaged walls or repairing a dishwasher that has stopped working.

4. Depreciating Assets – these are stand-alone functional items that are generally not affixed to the building that decease in value over time. Washing machines, blinds and carpets, even solar panels and solar hot water units are also depreciable assets. Their cost may be depreciated over the effective life of the asset and claimed as a tax deduction over a number of years. Claiming depreciable items are particularly relevant
if purchasing a brand new property.

5. Other Holding Costs – other expenses associated with owning an investment property. Including body corporate fees, cleaning expenses, gardening costs, building
and contents insurance premiums, rates and management fees.