By Paul Bennion, Managing Director of DEPPRO
May 2018 was a historic month for the property market in Australia with the average size of a home loan nationally hitting the $400,000 mark for the very first time. ABS housing finance figures for May 2018 show that the average home loan in Australia stood at $400,100.
This compared to $398,100 for April 2018 and represented an increase of over $20,000 in the size of the average home loan in Australia during the past year. During May 2017, the average home loan in Australia stood at $380,000.
However, since May 2012, the average home loan in Australia has jumped by over $100,000 when it stood at $299,400 six years ago.
The ABS figures show that New South Wales currently has the largest average home loan in Australia at $467,300 while South Australia has the lowest average home loan at $309,700.
Surging property prices in Melbourne meant that Victoria recorded one of the biggest increase in the size of an average home loan which increased by over $22,000 during the past year.
Rising property prices in most capital cities in Australia has resulted in the average home loan steadily rising over the past six years. These rising property values have meant the borrowers have had to increase their level of borrowing to purchase a home.
The overall rise in average home loans comes at a time when property investors are now having to deal with the financial challenge resulting from the decision of many financial institutions to raise interest rates for investment style home loans.
Property investors throughout Australia are now under pressure to find funds to finance their larger home loans at a time of higher interest rates for investment loans. That is why is it critical property investors claim their full tax depreciation benefits associated with property investment. These tax depreciation benefits can amount to thousands each year that can allow property investors to help pay their home loan mortgage.
An investor can claim these tax benefits by using the services of the tax depreciation specialist called who prepares a tax depreciation schedule. A depreciation schedule is a report undertaken by a quantity surveyor company (such as DEPPRO).
It generally should be undertaken when the investor buys the property. You only need to do one depreciation report for a property and it can be updated each year by the accountant if the investor for example, installs a new kitchen.
If a property investor has not claimed tax depreciation benefits in the past, they can do retrospectively which can give a massive boost to their cash flow. The cost of a depreciation report as prepared by DEPPRO is around $600 and this is tax deductible and covers the lifetime ownership of the investment property.
Visit deppro.com.au and complete the details to ensure your client receives a higher return on their cashflow.