Australia becoming a second home for paper losses on second-home property investment
An investment expert asks how comfortable Australians are, really, with the idea of negative gearing in property purchases. An annual income loss may or may not be offset by the tax reduction, leaving investors vulnerable if falling home values wipe out their expected appreciation. One out of five taxpayers have bought property to let … and half of them are taking a bath on the investment. Read the full story here.
A flat? Perhaps we should call it a thin
A report from the Melbourne City Council shows that developers have been taking advantage of lax density rules to build some of the tiniest units conceivable, residences that would be banned in most major world cities. About 40 per cent of the city's newest apartments are smaller than 50 square metres. The report blames investors for the proliferation of shoebox suites – and investors are buying 85 per cent of Melbourne apartments. The report will likely result in a movement by Melbourne’s new regional planning organisation to mandate larger apartment sizes. Read the full story here.
RP Data analyst expecting property growth of 5 per cent for remainder of 2014
RP Data Senior Research Analyst, Cameron Kusher does not call the recent fall in prices the start of a correction. “I don’t think it goes into correction territory until we start to see maintained falls for six or 12 months.” The fall is cyclical for May, he said, noting this may be a loss of “exuberance in the market". Kusher expects a much more moderate year for growth, “probably half of what we saw last year". Read (and watch) the full story here.
First-time homebuyers missing the market
First home buyers in April matched the record low set last November for their proportion of the loan market. Investors hold nearly 30 per cent of new loans set over the previous year to April. ''State policies appear to have had their desired impact in directing first home buyer demand towards newly built homes rather than established dwellings,'' said St George senior economist Hans Kunnen. Read the full story here.
Ridiculous home sale of the week a bit more ridiculous than expected
A two-bedroom, one-bath house in Sydney’s Stanmore area, featured as a “dump” in a Daily Mail piece
we mentioned last week had been predicted to sell for about $800,000. Well, we were wrong. The selling price was $923,000. At least 20 parties registered to bid on the rubbish house. About 150 watched. Read the full story here
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