Bricks and mortar have long been the largest single investment most people have ever made. It's no wonder when you consider property values have doubled every 7 years in Melbourne since record keeping began in the 1800's. *

Even the UK has doubled every 7.4 years and they have kept record for over 900 years.

Rental vacancy is at an all time low at less than 1%. Economists are forecasting rental growth to increase by 20%-30% over the next two years.

Falling Interest Rates
In the past few months interest rate drops have put $151 per week back into the hands of property investors (based on a 2% reduction in rates on a $350k loan) whilst rents have increased due to high demand.

Victorian Growth
Over 5.3 million people call Victoria home including nearly 4 million who live in and around the suburbs of Melbourne. Growth is over 1600 people per week arriving from overseas and interstate 1400 of which are staying in the Melbourne area which encompasses the Devine Communities.

It is no wonder rental searches on re.com in January 2009 were 370,000 up from 240,000 in July 2008 and 193,000 in July 2007. Such massive rental demand increases pressure on rents.

Rental stress is a measure used to determine how much of the family weekly income can go into paying rent. The measure is 30%. Compared with Sydney and Brisbane who have almost reached their stress levels, Melbourne rents would need to increase by 38%, which translates to an $80 per week increase in rents.

Australian Demand
Unlike the USA which has 12 months of over supply of housing stock, Australia is approximately 8 months under supplied and the shortage has grown over recent years due to affordability keeping first home buyers out of the market and increased interest rates keeping investors away.

Both of these conditions have changed with the tripling of the first home grant to $21,000 for new homes and the recent spate of interest rate drops. This has seen both first homebuyers and investors start to return to the market, putting upward pressure on home and land pricing.

Tax Benefits
Australian residents have one of the most generous tax systems in the World when it comes to property investment.

It starts with a saving on stamp duty, which is only payable on the land portion when buying a home and land package off plan.

If the property is kept for 12 months from contract signing, then a 50% reduction in Capital Gains Tax also applies.

Add to this the effects of negative gearing and depreciation and an investor can see tax savings up to $10,000 per annum.

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