Australians have had a love affair with property for decades now. Over 70 per cent of us own or are buying a home, representing one of the highest rates of home ownership in the developed world.
And with real estate performing so well over the last ten years, more people are starting to sit up and take notice of property, not just as a place to lay their head at night, but for its investment potential too.
Adding to the growing appeal of housing as a vehicle for wealth creation is the fact that many investors are still wary when it comes to the share market, which came out on the other side of the global financial crisis battered and bruised. A lot of people lost thousands of dollars in individual portfolios and superannuation funds when the volatility of the stock market became alarmingly evident.
According to a recent article on news.com.au, figures released by the Federal Treasury and Australian Bureau of Statistics reveal that more Aussies are taking charge of their own retirement funds and becoming more “hands on” when it comes to wealth creation than ever before.
As our nation becomes richer, private wealth held through property, shares and other assets hit a record $6 trillion in the three months to December last year; an increase of 1.3 per cent from the previous quarter.
Commsec chief economist Craig James says this equates to a record $266,600 for every man, woman and child and adds that we also have less debt, with the biggest fall in private sector debt in more than nine years of 6.2 per cent for the December quarter.
But even with all of this newfound wealth, James says, “Aussie consumers are more focused on perceptions rather than reality.
“For most, the perception is that they are going backwards – the cost of living is rising, incomes aren’t keeping up and wealth levels are stagnating. But the reality is that incomes continue to grow faster than prices, while balance sheets are improving through record wealth levels and reduced debt levels.”
James says that contrary to public opinion, we as a nation have never been wealthier than we are today, with our level of wealth doubling over the past decade. And as James notes, the property market is largely responsible for this boost to our fiscal health.
“Home prices must take much of the credit in driving this wealth to record highs,” he said. “We have more wrapped up in the family home, which has continued to rise in price and been the key driver.”
Yes we certainly do live in the lucky country where we can take control of our destiny if we chose to.
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