A Property blog by Paul Bennion.

One of the most significant trends in the Australian property market is the ageing profile of property owners.

This will have major implications for property investors and developers over the coming years as it will shape the type of properties most in demand from property buyers.

In particular, the ageing profile of property owners has already led a big increase in the number of people seeking to downsize to apartments.

The demand for apartment living in Australia will remain strong for the foreseeable future due to the ageing of our population.

This trend is highlighted by the fact that over the last decade the number of people in Australia aged 60 and over has jumped by 1.2 million persons or 35% to 4.8 million persons.

People aged 60 years and over currently account for around 20% of our entire population or one in four persons in Australia.

The reality is that as the number baby boomers continue to age, so will the growth in people aged 60 years and over seeking to live in higher density homes such as apartments.

This ageing of our population has seen a growing demand for apartment living in established areas of major capital cities as baby boomers want to live in apartment developments that are close to their current residences.

DEPPRO has been finding that property investors throughout Australia have been capitalizing on this trend in greater numbers over recent years especially in the capital cites of Brisbane, Sydney and Melbourne.

The generous tax depreciation benefits associated with buying a new apartment has also been encouraging more investors to purchase apartments.

While there are many issues concerning the depreciation entitlements on properties, in most cases, strata style homes such as new apartments provide a higher rate of depreciation than houses – all being equal.

Buying a new apartment, for example, can provide a taxpayer with considerable depreciation benefits because of the significant tax benefits they offer through depreciation.

Some DEPPRO clients are achieving that tax benefits obtained through depreciation can be equivalent to 60% of the total purchase price of the property. In some cases these tax benefits can total $300,000 based on a purchase price of $500,000

A key part of ensuring that the investor obtains their full tax benefits is to have a professional depreciation professional prepare a comprehensive depreciation schedule. Even an older style apartment can also qualify for substantial tax depreciation benefits if a depreciation schedule is undertaken for the property.