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Perth tenants should brace themselves as rising house prices, improving economic conditions and more newcomers to the state combine to force up rents this year, a leading property researcher says.

The latest rental report by Australian Property Monitors shows asking rents in Perth have increased in the first three months of the year.

The median weekly asking rent for houses in the metropolitan area is now $370, a $10 increase on the previous quarter and the first rise in more than a year, while units increased $8, to $358.

But with rising house prices, increased rents have not led to increased yields. The gross yield for houses is now 4.06 per cent, while units are yielding 4.62 per cent.

That leaves Perth ahead of only Melbourne among all state capitals.

APM economist Matthew Bell said he expected Perth rentals to increase a further $10 a quarter for the rest of the year, with a strong resources sector and population growth the driving factors.

But this was unlikely to be fast enough to maintain yields, which would drop slightly as house prices rose further. The median Perth house price is believed to have passed $500,000.

Really, the outlook for both rents and house prices is pretty strong,” he said.

“Yields will probably soften again, but historically they are at pretty good levels.”

Houses were usually bought by investors for capital growth, with units offering better yields, Mr Bell said.

Meanwhile, the Urban Development Institute of Australia said its own research showed a six-month delay in planning approval could add 7 per cent to the price of an average block in the metropolitan area.

UDIA WA chief executive Debra Goostrey said developers were doing what they could to ensure “affordable” land was being made available during a time of increasing prices.

“We also need the support of a fast and efficient planning approvals process to avoid costs associated with delays,” she said.

Her comments follow those last week by property researcher Terry Ryder, who said claims of housing shortages were a beat-up by property industry lobby groups.

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RELIEF may be in sight for renters who have been hit in the hip pocket by skyrocketing rents over the past few years.

There has been a small decrease in rental rates across Australia’s capital cities over the June quarter, suggesting rental yields may have hit their peak, leading property statistics agency RP Data says.

Weekly house rents fell by 3.5 per cent nationally over the June quarter while unit rents dropped 0.6 per cent.

The largest fall was in the Canberra market with a drop of six per cent for the June quarter in the housing market, where the median weekly rent fell from $530 in March to $498 in June.

The only mainland capital city to experience a nearly six per cent rise in rent was Darwin, where renters can expect to fork out about $100 more per week than those in Sydney, where rents dipped by about five per cent.

“It now appears that the rental market may have peaked with national weekly median rents falling slightly in each month post March 2009,” RP Data’s Tim Lawless said in a statement.

“And with rental rates now coming off the boil and property values rising we are seeing the first signs that rental rates are eroding.”

Rental vacancies remain tight across the nation with all capitals recording less than three per cent vacancy in stock.

Source  :   www.news.com.au  

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Further increases in petrol prices are predicted as Australia’s unleaded benchmark price scaled a 10-month high of almost $100 a barrel in the past week.  

While the continued signs of a recovery in the global economy had been great news for share market investors, the same could not be said for motorists, Commonwealth Securities economist Savanth Sebastian said.

The Australian Institute of Petroleum’s weekly report showed the unleaded petrol prices rose by an average 1.9 cents per litre in the past week to 124.5 cents.

The average metropolitan price rose by 2.6 cents a litre to 124.2 cents, while the regional average price rose by 0.7 cents to 125.1 cents.

“The glut of oil inventory on global markets is not putting downward pressure on prices,” Mr Sebastian said, adding traders and investors were focussed on the recovery story.

Even a strong Australian dollar has not been able to significantly absorb the rally in oil prices.

This resulted in the benchmark for Australian unleaded petrol – the Singapore gasoline price – rising to a 10-month high of $99.70 from $97.33 in the past week.

“If there is any consolation for motorists, it is that the rise in pump prices is likely to be rather sedate,” Mr Sebastian said.

“The petrol price will rise over the next fortnight, but only modestly, up around three to five cents a litre.”

Source  :  www.thewest.com.au

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What is superannuation?

Superannuation is a way of saving for your retirement. Both you and your employer can make contributions that accumulate over time andsuper this money is then invested in shares, government bonds, property, or other appropriate investments.                                 

On retirement, or after disability or death you then receive the money (less charges and taxes) as regular periodic payments (ie, a pension), a lump sum payment, or a combination of both.

Employers must contribute to an employee’s superannuation fund. This is called the Superannuation Guarantee, which came into operation on July 1, 1992.

The amount of the contribution is 9 per cent of an employee’s wages (excluding overtime, leave loading and fringe benefits).

Some employees are left out. The Superannuation Guarantee (Administration) Act says that employers do not have to pay the Superannuation Guarantee in certain circumstances.

Some of the exceptions are:
• employees earning less than $450 per month;
• employees under the age of 18 who work 30 hours per week or less;
• employees over 70 years of age;
• anyone paid to do domestic or private work for 30 hours per week or less.

Can the employer pay more?

An employer can make payments above the compulsory superannuation guarantee as:
• a reward for a worker’s performance;
• a type of co-payment, where the employer’s contribution increases in line with the employees voluntary contribution; or
• a ‘salary-sacrifice’ – this is where the employer makes a contribution that would otherwise be paid as salary.

Note, there are limits to the amount of salary sacrifice that can be made in a financial year.

If you want your employer to pay more, you should get advice from a financial advisor, but keep in mind that employers are limited in the amount that can be claimed as a deduction for superannuation contributions made for a particular employee.

Check with your superannuation fund or the Australian Tax Office to find out what these limits are – they change each year.  www.ato.gov.au

Should I contribute too?

If you have money left over after your weekly expenses, and you want to save for the future, you may want to consider making superannuation contributions as compared to other forms of investment.

Note, there are aged base limits that affect whether or not you can contribute to superannuation – for details, see the Australian Taxation Office web site.

Some of the advantages are:
• generally, you pay less tax on interest from superannuation savings than bank interest;
• with a ‘salary sacrifice’ the superannuation contribution is taken straight out of your wages, so you are not tempted to use it for purposes other than savings.

There are limits to the amount that you can “salary sacrifice”;
• the interest on superannuation savings is ‘compounded’, that is, interest earned by the superannuation fund is added to the total investment, so the interest earns more interest.

The Australian Prudential Regulation Authority estimates that a sum of money ‘compounded’ at 7 per cent a year will double in value in ten years; and
• you may be able to access the benefits of the low income super rebate and low income spouse rebate.
• you may be able to access financial incentives offered by the Government such as the co-contribution scheme. Under this scheme Government will contribute up to $1500 (depending on your income) when you contribute to your fund.

Check the Australian Taxation Office web site for details.

Ultimately, the pros and cons of contributing to superannuation is something you should get advice about.

What are the tax advantages?

The maximum tax rate for your employer’s contribution is 15 per cent.

The income you earn through the fund’s investments is also taxed at a maximum 15 per cent rate.

Salary sacrifice contributions will be taxed at 15 per cent.

Once you reach 60 you can withdraw your superannuation as a lump sum or income stream tax free.

There are also tax advantages if you contribute to your spouse/de facto’s super fund. The set off depends on their income. Check the Tax Office for details.

What laws apply?

The main laws that apply to superannuation are the:
• Superannuation Industry (Supervision) Act and Regulations (regulates most private superannuation funds);
• Superannuation Guarantee (Administration) Act and Regulations (tells employers the minimum contribution they must pay);
• Income Tax Assessment Act,.

The jargon

Accumulation funds – money is invested and the final benefit depends on the total contributions, plus earnings of the fund.

Annuity – like a pension. You receive regular periodic payments for either fixed amount of time or until you die.

Benefit – the money paid to you out of the superannuation fund or held on your behalf within the fund.

Contribution – the money paid into the superannuation fund by either you or your employer.

Defined benefit funds – the final benefit is paid on the basis of a specific formula, so the employer carries the risk if the growth of the fund does not cover the benefit.

Lump sum – money received in a single payment.

Preserved – money that you cannot withdraw from your fund until retirement or certain other events, eg reaching a certain age and leaving employment either temporarily or permanently. This includes money paid by your employer, interest earned on that money or contributions paid by a self-employed person which have been claimed as a tax deduction and any undeducted contributions you make after 1 July, 1999.

Rollover – transferring money from one fund to another.

Unrestricted or non- preserved amount – money that can be paid to you at any time form your superannuation fund

Rights to information

You are entitled to certain information from your superannuation fund. This includes:
• a member statement which shows the amount of your benefit at the start and end of the relevant period, the amount that is preserved and contact details (generally provided annually);
• a fund report which shows the fund’s financial position (generally provided annually);
• notification of changes that affect you, e.g. a change to the superannuation fund’s rules; and
• a statement that shows your benefit, including death benefits when you leave.

Source  :  www.news.com.au

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