When you’re young, home ownership seems difficult. Between HECS debt, low-paying jobs and the sheer financial wall to climb before you have a deposit, buying property can seem incredibly daunting.
But as you go through life, it becomes more and more of a reality. As you reach the point where buying real estate becomes realistic, you’ll have some big decisions to make. We’ve put together three reasons to take the leap from renting to buying.
Pay yourself not your landlord
Across our eight capitals, CoreLogic RP Data notes that the median rent is $484 per week. Pay that across a calendar year and you’re putting over $25,000 a year in your landlord’s pocket. But what if you could pay it back to yourself? That’s the power of property.
If you can get past the initial expenses such as paying your deposit and securing a home loan, you’ll be increasing your net worth weekly by paying off your mortgage. You can even use the money you’ve paid into the property as equity to buy a second! This shows that although buying a home may be difficult, it’s well worth it as a method of taking control of your financial future.
Take advantage of the market
Capital gains are a beautiful thing indeed. While they seem to be slowing somewhat in the current market they certainly aren’t stopping as they are sitting at roughly 7 per cent for the year averaged across all five capital cities, according to CoreLogic.
The value price increases have been happening in a similar fashion for the last 30 years as shown by a Reserve Bank report. This suggests that in the long term, property values are likely to trend upwards – meaning that your investment should appreciate over a long period of time.
Secure your financial future
Retirement is a costly exercise. According to the Association of Superannuation Funds Australia it’ll set you and your significant other back almost $60,000 a year.
The Australian Bureau of Statistics reports that the average age at which one retires in Australia after 45 is 54 years, while the average life expectancy is 82 years. This means that over 28 years of retirement you’ll require almost $1.7 million to live a comfortable life.
Purely relying on savings is unlikely to get you there, but reaping the long term rewards of owning property just might!