With housing prices soaring, it is time to question whether or not it is worthwhile investing in home ownership or whether it is better to rent for life.
The Source of “The Great Australian Dream”
The ideals associated with modern home ownership are derived from those in Britain and North America.
Both of these ideals have contributed towards “The Great Australian Dream”, though to be honest there is nothing Australian about it.
It is an ideal that has plagued the western world since property became a measure of status and financial security. Especially when considering raising a family.
Dreams ‘ain’t what they used to be
Like everything, over time this ideal has evolved. Baby boomers and international investors have been quick to stock up on properties which increase their income. Though as before, this is not limited to Australia.
This is happening on a global scale.
Rather than it being a sign of the hoarding, aging population that is “the baby boomer”, it is rather a sign of changing values.
Younger generations are less likely to be as family focused as they previously were. Due in part to the increasing education levels of women, as pointed out brilliantly by Sir David Attenborough.
One Location for Life?
One of the hardest choices when considering home ownership is where to settle. It is doubtful that in old age you will want to live close to the city, that being said it is also doubtful that as a young individual you would want to live in the middle of nowhere.
Regardless of the location chosen, home ownership for young Australians are often restricted to a single location being occupied for a minimum of 10 years.
As such it is not only a financial investment, but also one which will impact the social life and career of the individual buying the property.
A Nomadic Culture
Younger generations are more likely to travel than their predecessors, and that’s saying something seeing as Australian’s already had a reputation for travelling wide and far.
The reasons for travel vary, but one thing is certain. The availability of cheap international travel as well as factors attributed globalization have young Australian’s frothing at the mouth thinking about ideal spots to see and potentially settle down in.
Debt, It’s a Trap!
The Australian education system constantly implores to students to avoid debt, as do parents and grandparents. This advice has been taken to heart, and as a result most home buyers fear the mortgage and debt in general.
Ah, bank debts; those monster that peek over your shoulder whenever you go to use your pay-pass; inducing guilt and concern about recurring repayments. As a friend of mine so eloquently put it while we were at the pub recently after I asked them if they would ever settle down:
“nah, I’d rather travel the world than buy the only house I could afford on my salary – which is in the middle of butt-fuck nowhere.”
Loss of community
One of the saddest losses due to the inability to afford a home is that local communities suffer. Councils have become bureaucracies rather than panels of individuals who want the best for fellow locals.
There are still plenty of ways to get involved within a local community. However a sense of apathy from younger generations who do not foresee themselves residing in a location long term is understandable.
Instant Gratification, Survival and Math
The property market is one that needs long term investment in order to be of benefit to the individual. While renting is amazing for the short term. In the long term you will end up paying just as much if not more than if you owned your own home. Right?
Wait…is that right? Math time!
If I pay the average rental price which is $200 a week. 200 x 4= 800 a month; 800 x 12 = 9,600
Average stay in a home after buying is 15 years. So, let’s assume my rent/hope doesn’t go up over the course of 10 years. 9,600 x 10 = 96,000
That’s a fair chunk; let’s look at what houses I can buy with that. NOTHING! Oh I tell a lie, you can buy a car space in the CBD, a small house in the country or land in the country.
The Silver Lining
Now while I wrote this blog post in response to Domain’s deplorable article which contained nothing but negative sentiment regarding those who want to move into the property market, I want to ensure you that there is a silver lining.
Young Australians don’t need home ownership anymore. Renting is the cheaper option in today’s economy. We get to travel like our forebears never did. We stay out of debt and we don’t become shackled to a single location for long periods of time.
The Europeans have been renting for years, and it is the way of the future. Though some may argue that the minority monopolizing on the housing market are destroying “Australia’s way of life” – I argue that they are not.
But hey, look at it this way! if baby boomers are destroying the planet, the economy, the education system, heck, just society in general then I want you to remember this. At least they will die before you… feels good, right?