A recent report from the Australian Bureau of Statistics shows that today’s 24 to 39 year olds are far more likely to rent than their parents at the same age. While not surprising, the result is timely given the noise around property prices at the moment, and a subsequent drop in confidence amongst first home buyers. Long term, buying your first home is the best financial decision that a person can make and when you buy ends up mattering very little.
1. Poverty is more likely at retirement as a renter
Most first home buyers are young and therefore most are thinking very little about retirement. As people age however, and more particularly once they hit retirement, being a homeowner means you are far less likely to be in poverty than someone who rents. Paying market rents once you are on a retirement income, versus having a fully paid off home, is a major expense differential.
How do we increase home ownership?