The National Rental Affordability Scheme (NRAS) is set to help out some property investors in Australia as well as those who struggle to afford rental properties.
In an attempt to make renting more affordable for lower income earners the NRAS scheme gives tax free bonuses to investors who agree to rent out their property at 20% below market rent. The “market rent” is evaluated by independent valuers when the property is completed and every three years there after. It appears that the property has to be a new one to. Which is pretty silly when you think of it – aren’t they by definition the highest cost properties: wouldn’t a renter choose a new rental over the “second hand one” down the street if the price was equal anyway?
Well you read it here first. Last week I posted that I was concerned that Australian first home buyers were getting in too deep. Now there are news reports are that Commonwealth Bank’s CEO, Ralph Norris, believes that the generous government grants could lead to a residential property bubble if its extended past the 30 June deadline.
More on First Time Home Buyers in Australia Getting in Over Their Heads
Well its hard to find any good new that relates to Australian property investment these days. But here’s a couple that caught the eye recently.
Given the parlous state the iron ore industry which currently laying off thousands of workers since Christmas its interesting to see that a caravan park in Karratha has been snapped up by investors for $12 million.
Sigh – sometimes I feel sooo old! Like I can remember the last time it was hard to get a job especially if you were young with no qualifications and experience. That time has come again, even in Australia, and the newspapers are going flat out to explain to the under-25’s what to do with this strange concept that the world doesn’t owe them a living of at least $70k straight out of school!
I hear rumour that a few brave aussie property investors are eyeing up the US market where there are some very cheap residential property investment opportunities at the moment. Forget a mortgage, houses can be had for under $10,000 in Detroit – that’s credit card country. Even allowing for the currently lousy A$ rate that’s around A$16,000 – for a whole house, and yes including land!
More on Australian Property Investment? Or Overseas Property Investment
The combination of low interest rents and generous government grants has seen the first-home owner market start to pick up in the depths of the doom and gloom of the global financial crises.
There are two bright spots in the Australian economy at the moment: gold and farming. So in terms of property investing: Kalgoorlie is about the only mining town I’d even consider investing in at the moment! As an established gold mining center with great proven reserves it has a bright century or so ahead.
Well first the good news – the generous grants to first-home buyers seem to have worked. Some 30,000 people have applied for the up to $21,000 grant between mid-October and end January 2009. Figures for grants approved have ramped up to nearly 13,000 in January. The scheme is currently due to run until 30 June.
Quick 6-star hotel rising out of the sea – Dubai’s Burj al Arab – is currently the correct answer – but what about Yanchep’s Rising Lotus may one day join it.
