A General blog by Paul Bennion.

Falling interest rates have boosted the borrowing capacity of investors and lifted the average home loan in Australia to $308,300.

According to the December 2012 housing figures from the Australia Bureau of Statistics (ABS), the ACT now has the largest average home loan of all cities in Australia at $350,700. This is closely followed by the Northern Territory at $337,000 and NSW at $341,800.

Paul Bennion, Managing Director of DEPPRO said that the average home loan in the ACT jumped by over $30,000 over the past year.

“There were also big surprises in the size of average home loans in WA and the NT, with average increases of more than $25,000 during 2012.

“With financial institutions now offering fixed rates for less than 5%, it is expected that the average home loans will increase even further during 2013,” Bennion predicted.

Bennion also emphasised that this would likely be the case in vibrant property markets such as Darwin and Perth, where property values are on the rise due to increased activity by property investors.

“However, interest rates are not expected to remain low for an extended period of time and investors with large borrowing should ensure that they maximise their cash flow by claiming their full tax depreciation benefits,” Bennion advised.

If carried out properly – tax depreciation benefits on an investment property can equate to 60% of the total purchase price of the property.

“DEPPRO currently estimates that only a small minority of property investors claim their full tax depreciation benefits by obtaining a depreciation schedule from an authorised company.

“The cost of this report can be as little as $599.50 (which is tax deductible), even though the cash flow benefits it can deliver each year may be several thousands dollars for each property,” Bennion said.

To gain the maximum tax entitlements, investors should consider the services of a qualified and professional tax depreciation company, such as DEPPRO, who is a member of The Australian Institute of Quantity Surveyors (AIQS).
“AIQS membership is restricted to companies that have the appropriate qualifications and who have demonstrated the required level of professional competence after a statutory work period,” Bennion said.