Australians building up wealth in their homes
It's a common perception amongst Australians that real estate is your ticket to financial freedom. So, it shouldn't come as a surprise that Aussies are using their new double storey houses and granny flats to their advantage. While some are pursuing investment income, many are simply building up equity in their homes - and at an astonishing rate too.
Home values in Perth
While home values have remained relatively stable over the past year and a half, simply looking at the market over the last five years will show you just how well Perth property owners have done. According to the Real Estate Institute of Western Australia, the median price for a house in Perth has been around the $550,000 mark since the December quarter of 2013.
However, just three years prior to that, the median house price was $470,000. Over that time, those with residential real estate will have seen a median-priced home appreciate in value by around $80,000 - that's like having an additional income! For those looking at building in Perth now, these figures will be important to keep in mind.
Debt vs Assets
The Australian Banker's Association has released a report which shows that the average Australian household is accumulating debt much faster than it is increasing its income. Taken in isolation, this could be a very frightening statistic. However, Aussies are building up considerable wealth in their homes, which is more than compensating for this increased level of debt.
"As might be expected in a low interest rate environment, households are increasing their borrowings for housing. But the growth rate is much slower today than it was prior to the global financial crisis," said ABA Executive Director - Industry Policy, Tony Pearson.
He went on to note that even though growing debt is outstripping increases in income, the value of household assets is making up for this. The average household has $3 in real estate assets for every $1 of housing-related debt. The figure for all debts and all assets is even more promising.
"Every dollar of household debt is matched by almost $6 of assets," said Mr Pearson.
The choice to invest in property
While most home owners don't set out to invest in real estate, they are usually aware that buying their own home not only gives them more choice, it means they are increasing their own equity instead of someone else's.
Talking to apg homes about how to build your first home could be a great start to not only getting off the rental treadmill, but also making the most of your money and creating a financially independent future for yourself and your family. With a wide range of display homes in Perth and conveniently located offices, starting on your journey to home ownership has never been easier.