10/11/2009

10 November 2009

Government Superannuation Cap Stimulates Property Interest
… 72 % to invest in property according to Archicentre poll

The Federal Government's move to cap superannuation contributions at $50,000 has stimulated interest in renovation and investment in negatively geared property, according to Archicentre, the building advisory service of the Australian Institute of Architects.

A recent extension on a property creating an indoor / outdoor living area

In the latest Archicentre Consumer Sentiment Poll of over seven hundred respondents, seventy two per cent said they would be putting their extra funds into property. Forty per cent said they would invest in renovation of their own home and thirty two per cent said they would invest in a negatively geared property. Twenty eight per cent said they would use their extra funds by investing in shares. Michael Cooper, Tasmanian State Manager of Archicentre said with many Australians planning to top up their superannuation with equity in the family home or investment properties, the current rising house prices will have a significant impact on the lifestyles of hundreds of thousands of Australians. "The added bonus for people investing in the family home is that once completed and sold it is not subject to capital gains tax and they can enjoy the new renovations. Mr Cooper said whilst this is a time of opportunity, people renovating their homes need to ensure they do their home work in relation to renovation and design to ensure they do not devalue their property and pay out tens of thousands of dollars for the privilege.

"People purchasing an investment property can run into financial difficulty if they do not carry out a thorough inspection of the property.

"Last year, one out of three homes which underwent the independent pre-purchase inspection by Archicentre had faults which required attention allowing prospective buyers to factor in the costs of repair before making a bid.

"People who buy a 'lemon' are often confronted with unplanned borrowings to fix problems such as plumbing, wiring, rising damp and roof problems which can run to tens of thousands of dollars of extra funds cutting directly into the level of the superannuation returns."

According to Mr Cooper the best defence against the loss of value in the family home as a superannuation asset is to get a professional independent assessment of the property before purchasing and of any renovation before commencing.

Archicentre have included an informative Do It Yourself Checklist for Home Buyers on the website at http://www.archicentre.com.au/survival_kit/diy_checklist.pdf which provides home buyers with a street smart guide to avoid purchasing a LEMON.

www.archicentre.com.au

Media Enquiries:
Michael Cooper, Tasmanian State Manager Archicentre (03) 6224 4738 Mobile: 0418 124 355
Ron Smith Corporate Media Communications Archicentre (03) 9818 5700 Mobile: 0417 329 201