Residential property: Do you look at it as a home or a financial asset?
Friday, 4 April 2014 12:00 AM
One of the golden rules in property, stay emotionally unattached, is the one most commonly broken. It’s understandable. For many people a home can only be considered from the heart, it’s our primary shelter and fulfils a deep need to have ‘a roof over our head’ and make a home for our family.
For others property is a powerful financial asset that has the ability to make money for its owners when it is traded astutely. The saying ‘property is the biggest investment you will ever make’ is true for a good reason, so maybe it is both a shelter and a money making asset.
The Australian Bureau of Statistics reports that our love of home ownership remains strong. At August 2011 a whopping 67 per cent of all residential dwellings were owner occupied; this has remained relatively unchanged for the past 50 years. Australians continue to enjoy one of the highest rates of home ownership in the world coming in 20th, ahead of Canada, the USA, the UK and New Zealand. Most surprisingly it is Bulgaria and Lithuania who lead the world in home ownership with 97 per cent of their citizens owning the home they live in.
When figures show that over the long run residential property outperforms gold, it’s impossible to not see property as a powerful asset. It’s a pity then that the investment working Australians have in stock, cash and commercial property, via their super, does not extend to residential property as well.