White hot tenant demand drives sale of seven NRAS homes in 10 days
Media release - 17th September, 2012
Investors take advantage of government NRAS incentives
- Seven new NRAS properties in Perth suburb of Waikiki sell in 10 days – these homes are generating rental yields in excess of 9%
- Raine & Horne NRAS reveals it has over 1,000 potential tenants waiting for subsidised rental accommodation in Perth
National Rental Affordability Scheme (NRAS) homes are selling like hotcakes to investors, with Raine & Horne NRAS reporting it recently sold seven new homes in just ten days in Waikiki, south of Perth, for $480,000.
Under the terms of the scheme, investors can purchase a new or off-the-plan property on the condition that they lease it for 20% below market rent to a tenant registered with NRAS.
“The seven properties are generating $840 a week, once the government incentives are taken in to account, which equates to a 9.1% rental yield, despite tenants paying rent at 20% below the market value,” says Will Trainer, Principal of Raine & Horne NRAS.
“These figures also don’t take into account the negative gearing and depreciation benefits still available to investors.”
At the same time, tenant demand for NRAS is at all-time highs in Perth, with Raine & Horne NRAS reporting it has in excess of 1,000 tenants waiting to secure a government-subsidised rental property.
“Low vacancy rates and rising rents in Perth have left the rental market bursting at the seams, which is placing more pressure on the supply of subsidised rental homes,” says Mr Trainer.
“We are receiving 30 to 50 new enquiries from prospective NRAS tenants every day.”
“In some extreme cases, we are hearing of people living in very temporary accommodation while they wait for affordable housing.”
To help address the 20% shortfall in rental returns, the Australian Government provides a rebate to investors who choose to purchase NRAS homes.
“This rebate runs for 10 years and currently gives investors $7,486 per dwelling per year,[i] which is income tax free, to offset the impact of rents fixed below the going market rate,” says Mr Trainer.
The state and territory governments also chip in with a contribution of $2,495 per dwelling, each year for 10 years.[ii]
This contribution is delivered to investors via a direct payment or a reduction in stamp duty, land taxes, or an infrastructure charge.
“Generally, government incentives offset the 20% rental discount,” says Mr Trainer.
Moreover, some investors are totally embracing the NRAS scheme to secure Perth rental properties.
“I know one investor has purchased 26 investment properties through NRAS in the last 12 months, and has the intention of owning fifty investment properties as soon as possible.”
For those wishing to know more about the National Rental Affordability Scheme, contact Raine & Horne NRAS on (08) 9390 1442, or visit rh.com.au/nras.
For further media information contact:
Will Trainer, Principal Raine & Horne NRAS on 0414 934 693
Andrew Harrington, National Marketing & Communications Co-ordinator on 02 9258 5400