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Dear Fellow Property Investor,
Home ownership in Australia, it seems, stretches far beyond the simple ‘brick’ and ‘mortar’ that makes up the average suburban house, it reaches right down into our identity and overall wellbeing.
Whilst all these ’emotional’ aspects of property investing are capturing the nation’s heart and interest, Australians under 40 are being locked out of home ownership – a dynamic that is driving inequality, and a new division of classes, based around home ownership and those that rent.
A survey released in August 2017 by the Reserve Bank of Australia (RBA) called; Household, Income and Labour Dynamics in Australia (HILDA), shows, renters tend to have a tiny fraction of the net wealth compared to those of home owners.
Analysis by Sydney University housing economist Dr Judy Yates shows that renters have far less wealth than home owners at every point of their life-cycle.
As in most instances your family home is by far the biggest source of wealth accumulation for Australian households, when the rate of home ownership declines the pool of “wealth have nots” grows.
Further to this point, the recent HILDA survey shows that Home ownership among women aged 35 to 39 years tumbled from 67 per cent to 48 per cent between 2002 and 2014. For men in that group, the fall was from 55 per cent to 48 per cent.
And for both sexes combined it was from 61 per cent to 48 per cent, between 2002 and 2014.
Analysis by the Grattan Institute think tank shows the rate of home ownership fell in 95 per cent of Melbourne suburbs between 2011 and 2016 and in 87 per cent of Sydney suburbs.
The sad reality is that for under 40 year old first home buyers in the major capital cities in Australia is that home ownership is becoming a distant and in many cases unrealistic dream.
With home prices soaring exponentially over the past 2 decades, with no end of price easing in sight.
There is an ever increasing percentage of homes that are selling well above the million dollar price point, especially in Melbourne and Sydney.
So the million dollar question remains…Is it better to own or rent property in Australia in 2018?
And that’s exactly what this video answers, both from an emotional and financial perspective.
Kind regards,
KONRAD BOBILAK
INVESTORS PRIME REAL ESTATE