THE HARD ROAD TO HOME OWNERSHIP

Negative gearing – it’s a term often used and often blamed for a lot of things – property prices, global warming, Kim Kardashian – you name it.  Many Australians seeking to enter the property market are finding it tough – some almost impossible to buy that first home.

Here are some simple truths that seem to have disappeared from the property ownership discussion recently.  Yes it’s hard to buy a property – really really hard to buy a property.  Ask anyone who has bought a property over the last 30 years and they’ll tell you it was hard for them too.  Back in the 1970’s we had to contend with the OPEC crisis and the flow on effect that had to inflation.  In the 80’s it was interest rates that ballooned out to 18% - cop that! 

In the 90’s we came off the recession we had to have – unemployment hit double digits and confidence was sucked out of the economy.  Since 2000 the world was absolutely smashed during the global financial crisis.

It’s hard – always has been, and probably always will be!

 Am I sounding unsympathetic?  Absolutely I am.  Since working as a financial adviser since 2002 I have worked with so many people determined to own their own home.  A recovering drug addict, a single mum, two people that have left a lasting impression on me.  They didn’t whine – they didn’t complain – they just knew what they wanted and asked for advice to help them get there. 

My advice is far from rocket science.  Set up a separate bank account and save what you can afford to each pay day.  It may take 3 years, it may take 5 years – but if you can set a goal and stick to it – yes you can achieve the seemingly impossible – like home ownership.

Someone in there 20’s may have a life expectancy to age 90! – that’s close to 70 years.  No point renting for the rest of you life and living pay day to pay day.  No matter how long it takes to save for a deposit the reality is once you own a home – you can focus on paying it off and then never worry about a mortgage repayment again. 

The road to home ownership is hard.  However – the road to financial independence without owning a home is even harder.  It has never been more important to focus on home ownership.  The government is making the age pension harder to receive, so owning a home outright in retirement is really important.