A Property blog by Paul Bennion.
The latest finance figures produced by the Australian Bureau of Statistics (ABS) show that Australia is currently enjoying a property investment boom.
These ABS figures reveal a 0.3 per cent lift in the number of home loans written in August with the total value of loans taken out during the month jumping to $800 million.
All of the increase was driven mainly by investors who accounted for more than 49 per cent of all new lending through the month.
Significantly, this was the highest proportion of investor activity since the bureau started collating figures in 1991.
This current property investment boom is being driven my low interest rates. Over recent months, fixed interest rates have been pushed to record lows, with some finance firms offering as little as 4.5 per cent on two or three-year fixed terms.
It appears that a very large number of people are now buying investment properties in the belief that property prices will keep rising.
While this may be the case, investors should also appreciate that history shows that property prices can also fall if interest rates begin to rise or the property market softens
That is why they should take a professional approach to buying property during the current boom times and carefully research where they are going to purchase to ensure that it is in an area of scarcity so it will be least affected by any possible market downturn.
At the same time, investors should also ensure that they use professional services when buying their property such as a qualified tax depreciation company so they maximize their long term cash flow which can be critical to retaining the property if the market begins to soften.
In particular, investors should protect their interests and ensure that they select a company that is fully compliant with ATO rulings, members of the public should select a company that is a member of The Australian Institute of Quantity Surveyors (AIQS).
AIQS is the professional standards body for quantity surveyors throughout Australia and enjoys a close working relationship with the ATO.
DEPPRO is an Associate Member of AIQS and uses systems that are fully compliant with ATO rulings.
Unfortunately, there are many businesses in the industry that did not have the qualifications and experience to ensure property investors received quality information.
For depreciation professionals, having the appropriate training and qualifications and being a member of organisations such as the AIQS is critical in ensuring you can provide the best advice for your clients.
Without it, it is impossible to keep up-to-date with legislative requirements. Companies whose representatives are not members of AIQS are also not bound by any Code of Professional Conduct.
Property investors should be wary of companies who are not members of AIQS and employ salesmen or women touting catch phrases and a more dubious approach to providing advice in relation to tax depreciation entitlements.
In many cases these companies probably do not even complete the depreciation schedules but out-source the work to others who do not even see the property and simply apply a one-size-fits-all approach to preparing it.