Property Observer, Chan & Naylor’s eight reasons they think buying is still the best decision:
- IT IS FORCED SAVINGS
Australians are some of the worst savers in the world, therefore being forced to put your money in a long-term asset is a highly prudent exercise that offers reassurance in later life. There is truth in the old adage that ‘I might retire broke, but at least I have my house’.
- IT CAN COVER YOUR RETIREMENT COSTS
The majority of us are living longer however as was evident from the recent budget it is clear that the government can no longer afford to pay for the growing number of pensioners. Having an asset like a house will actually help pay for your long term stay in a retirement or care facility, something that potentially awaits many of us at some point.
- NOT OWNING MEANS THAT YOU ARE SUBJECT TO RENTAL MARKET FORCES
As a middle aged unemployed tenant you will be subject to the market forces of the rental market as dictated by your landlord who can throw you out as soon as you fail to meet your rental obligations. Conversely as a home owner it is more likely that you can come to an arrangement with your bank should circumstances require it.
- HOME OWNERSHIP GIVES YOUR FINANCIAL CERTAINTY
If you have purchased the right property, it will increase in value above the average, but the amount you have borrowed will remain relatively fixed. Rental income however increases with the value of the property market, so do you really know what you will be paying for your two bedder in 30 years’ time?
- HOME OWNERSHIP GIVES YOU PERSONAL CERTAINTY
Buy what you can afford now rather than what you necessarily want and you will be in front as you enter the second half of your life rather than waiting for a late win.
- YOU CAN LEAVE YOUR GRANDKIDS SOMETHING
Most people aim to leave their legacy to the next generation and a home is a fantastic asset to pass on.
- BRICKS AND MORTAR ARE LESS VOLATILE THAN THE SHARE MARKET
If the value of the housing market looks like it is on a downward cycle for now, it is nothing compared to the wild swings of the stock market over the last decade. Where would you rather put your hard earned money?
- THERE IS ONLY A FINITE AMOUNT OF RENTAL PROPERTY TO CHOOSE FROM
At end of day everyone needs somewhere to live, and as only 30% of the Australian housing market is owned by investors, limited choice means taking matters into your own hands.
Disclaimer: This editorial provides general information only. Before making any financial decisions, consult a financial planner to take into account your individual needs.