Kochie’s weekly market update: Property trends, how ATO is tracking your AirBnb income
Hey gang, get up to speed on this week’s financial trends with my market updates.
Thankfully global sharemarkets have flattened out compared with the rollercoaster of the previous week. We should keep an eye on the American sharemarket tonight because the latest round of US-China trade talks are expected to be completed.
Property Is All About Demand and Supply
I often remind people that when it comes to property, keep an eye and demand and supply figures as an indication of where the market is going.
Over the last couple of months we’ve seen a strong rebound in residential property prices in Sydney and Melbourne largely because of a shortage of properties up for sale… a lack of supply. But that is starting to turn.
The number of new listings being added to the combined capitals housing market has seen a hefty 44 per cent rise from the depths of the winter slowdown in early July through to the first week of October, according to property researchers CoreLogic.
But the number of new capital city listings over the past 28 days was tracking at the lowest level for this time of the year since CoreLogic started tracking real estate listings in 2007. Listing levels are still 13 per cent lower than the same time last year and 15 per cent below the 13 year average.
So the number of properties coming up for has risen sharply but still well down on previous years… a long way to catch up.
The number of new properties being built is also interesting. In the June quarter house starts fell by 10.5 per cent … the biggest decline in 10½-years, but apartment starts rose by 21.0 per cent.
Work started on 197,227 new dwellings over the 12 months to June, down by 14.3 per cent on the year.
I’ll keep an eye on these figures regularly.
Are Low Interest Rates Making A Difference
The continued fall in low interest rates is certainly sparking a pick-up in borrowing… but it could be in the wrong places.
The Reserve Bank and Federal Government would be hoping business would lift borrowing to invest to expand or upgrade their operations and hire more staff.
But the value of loans to business fell 2.1 per cent in August. It was different story with consumers and property buyers
Lending to households rose by 3.2 per cent in August after a 4.3 per cent lift in July. It was the biggest back-to-back increase in household lending in a decade.
Excluding refinancing, the value of owner-occupier home loans rose by 1.9 per cent in August with investment loans up 5.7 per cent.
And the share of first-home buyers in the home lending market hit fresh 7½-year highs of 30.1 per cent.
A Reminder… The ATO Is Tracking Your AirBnB (and other gig) Income
I’ve been telling people this for a while now, but AirBnB actually sent a note to it’s 200,000 clients that they are sending all their data to the Tax Office.
So if you’ve used AirBnB to rent out a room or property, the Tax Office knows how much you’ve earned in income and will be checking your tax return to make sure you declare it. They’ll get narky if you don’t and will ask why.
But remember that by declaring that income you can also offset the costs of listing the property/room on AirBnB as well as the costs of preparing the property.