It was followed by a string of other inner and north shore suburbs.Property investors would be thousands of dollars in the red each month in many sought-after Sydney suburbs as mortgage repayment costs outstrip rental income.
New investors in Darling Point units would face the largest shortfall, as monthly mortgage repayments on a median-priced unit would outstrip rents by $6893, new analysis of CoreLogic data shows. The median unit value is almost $2,437,000. New investors who purchased in a string of inner suburbs would be left more than $5000 short every month, as mortgage repayments outstrip rental income.A property is negatively geared when the cost of mortgage interest and expenses linked to owning a rental is more than the income it generates each year. Landlords can claim this cost as a tax deduction against their wage income to pay less tax.
AMP chief economist Dr Shane Oliver said it was harder for investors to negatively gear two years ago, given record low interest rates, but the market had changed markedly since.“The equation has changed dramatically since interest rates have risen and it’s really gone back to what it was in the past,” Oliver said.
Oliver said property investing could become riskier in the future, given the federal government’s plan to build more homes and possibly cut immigration levels, which could push house prices lower.“The rise in enthusiasm for property investment comes from lower interest rates and higher prices – now people may look to keep their money in the bank instead.”by last financial year if the average variable rate hit 6 per cent, which it has now passed.
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Source: 7NewsMelbourne - 🏆 18. / 59 Read more »