Budget Highlights Impact of Demographics
Tuesday’s Federal Budget highlighted the importance and impact of demographics on our economy, part of which relates to the structure of home ownership. Home ownership statistics help to demonstrate why this is important. According to figures from the ABS peak home ownership occurs between the 45-64 years of age and by age 65 we see that 75% of homeowners do not have a mortgage, and by age 75 that figure increases to 85%. While in contrast 54% of homeowners between 35-44 do have a mortgage, higher than the population average of 34%. Generally, the age group 65-74 has the highest rate of homeownership at 81%. Australia has older homeowners with little debt holding a large number of homes. The challenge is how to balance the lifestyle quality and options for older Australians while expanding homeownership across the wider population. Tuesday’s budget is only just starting to directly address this issue.
Foreign Real Estate Buyers Not the Main Price Drivers
Here are some interesting facts from figures published by FIRB and the ANZ Bank. In 2015-16 FIRB approvals for foreign buyers totaled $72.4 billion. There’s an assumption that 30-50% of approvals converted into purchasers, and that average purchase value was $620,000. In 2015-16 some 35-60,000 dwellings were bought by foreign investors of which 30-50,000 were new dwellings. Between 1995-96 a total of 250,000-450,000 dwellings were bought. In total foreign buyers account for 7-13% of annual turnover and hold 2.5-4.0% of all housing stock. From these figures, foreign buyers have not been the main drivers of prices, but they do have an impact on the construction sector which then has a major flow-on impact across the entire local economy.
We Love Our Parks
As Sydney’s housing density increases access to open space is an important part of urban development. Recent figures about the number of visitors to Sydney’s Centennial Parklands help demonstrate this. Visitations to Centennial Park, Queens Park and Moore Park have increased by 55% over the past three years. The figures are impressive and show that visitor numbers over the three years increased from 20 million to almost 31 million, and 54% visit at least once a week. With high-density living now far more common, these parklands play a critical role in Sydney’s green infrastructure. Centennial Parklands are now seen asa world-class destination for residents and visitors.
Investors May Be Overlooking Depreciation
While there have been some recent changes to tax rules property investors can claim legitimate tax deductions for the wear and tear and ageing of their investment properties. However, many investors may not be claiming all the legitimate items they can depreciate. One example is fixtures and fittings with a depreciable value less than $300 can be immediately claimed in the first financial year. Another point to keep in mind is that the ATO allows two previous tax returns to be adjusted so investors who may have missed anything do have an opportunity of amend their tax return. When buying any investment property old or new investors should always have a depreciation schedule prepared, and the cost of obtaining a depreciation schedule is 100% tax deductible. Looking closely at depreciation allowances will help ensure that property investors avoid common mistakes and so generate maximum cashflow from their investment properties.
Transition to eConveyancing
NSW is moving to a fully online system of property conveyancing. The next big eConveyancing mandate is less than 60 days away. From 1 July 2018, it will be a requirement to electronically lodge all caveats and standalone transfers, along with mortgages, refinances and discharges of mortgage and this will include non authorised deposit taking institutions. NSW is now at a midpoint along the transition to digital conveyancing for all mainstream property transactions to be in place from 1 July 2019.
Parking Fines at a $180 million Premium
Parking has long been a hot button issue, it’s one that Sydney residents know only too well. As a result, we have a stack or rules that even extend to strata buildings impacting both resident and visitor parking. Parking in NSW is, well a pain and it can be a costly one at that. It can be hard to find a spot and the revenue from parking fines, might surprise you. In the 2014/15 financial year, NSW motorists paid more than $31 million just for parking in no stopping zones. Plus $27 million paid for parking longer than permitted, plus $20 million for parking without displaying a ticket, and then $9 million for wrongly parking in a loading zone. Total all those fines and we had $180 million going into state and council coffers thanks to parking fines. Today it’s bound to have increased, given more cars, more people and more rules.
For more articles like this click here