A Finance blog by Paul Bennion.

At the end of 2013, I predicted that Brisbane would be one of the top performers of the Australian property market.

So far during 2014, this prediction is proving to be correct as underlined by the latest figures produced by the Real Estate Institute of Queensland.

These figures show that during March 2014, the Brisbane property market outperformed Sydney and Melbourne, with house values rising 2.9%. This was the second highest monthly increase in property values of any capital city in Australia next to Darwin.

Overall, during the past year, the median house price in Brisbane rose by nearly 5% to $435,000.

However, the potential for even stronger capital growth is huge because the median price of a house in Brisbane is $195,000 lower than Sydney ($630,000) and $80,000 lower than Melbourne ($515,000).

The growing confidence in the Brisbane/Queensland property market is further underlined by the fact that new home sales throughout the State jumped by 17.5% during February.

DEPPRO is finding that property investors have become very active in the Brisbane as well as the Queensland property market during recent months.

Investors are now buying into the Brisbane property market because rental returns still remain high and properties overall remain competitively priced with the potential for strong capital gain.

In particular, DEPPRO is finding that there is strong demand amongst investors for older homes which can be easily renovated in the Brisbane property market as evidenced by the large number of depreciation reports we have completed for such properties over recent months.

While tax depreciation benefits are most generous for new properties, older properties can also qualify for significant tax depreciation benefits.

For example, a property that is more than 50 years of age could still qualify for thousands of dollars each year in tax depreciation benefits for the owner.

Anyone who has purchased an older property for investment purposes should carefully consider these significant taxation benefits through depreciation that can be achieved before beginning any construction work.

Investors wanting to take advantage of opportunities in the Brisbane property market during 2014 should therefore ensure that they boost their cash flow through obtaining their full tax depreciation benefits.

In doing so, this will mean that they can more quickly build a property portfolio and achieve wealth creation in a shorter period of time.

It is estimated that only a very small proportion of residential investors make use of the tax depreciation entitlements which are available to all investors on all investment properties.

Many investors fail to understand that the tax benefits from depreciation can be just as important as rental income and that tax benefits obtained through depreciation can be equivalent to 60% of the total purchase price of the property.