Everyone needs somewhere to call home, a place of their own and whether you buy or rent, you want to be comfortable, safe and enjoy spending time there. While there are some people who prefer being on the move, living out of suitcases in hotel after hotel most people like to have a home of their own. It doesn’t need to be a mansion with a home lift – even if that is their own caravan, motorhome or live aboard boat, the common denominator is that it is theirs.
In some European and many Asian, African and Latin American countries, renting is more common than home ownership. Germany for example has only 42% of the population owning their own homes and countries like India, China, Argentina, Chile, South Africa have even fewer home owners. The tenancy laws in some of these countries often favour the tenant and ensure long term security in ways that make renting a far more attractive proposition than owning your own home. In others it is because there is a higher percentage of very poor people.
While tenants don’t have the ongoing expense of property maintenance and expenses such as rates or adding tenant requested items such as security alarms and doors and flyscreens, they also don’t enjoy the capital gains that accrue from property ownership. In these markets, rents are usually far less than mortgage payments and renters can invest their extra cash in various ways to make up for not having bricks and mortar behind them.
In the USA, home ownership sits around 65% in 2013, down from the peak of 69.2% in 2004. New Zealand has a large percentage of home owners, with some demographics such as people over 50 hitting over 90% owning their own homes. The world leader in home ownership by percentage of population is Bulgaria and Lithuania, both with 97% followed by Hungary at No2 with 91.9%. These countries were former communist states and so nearly all of the housing was owned by the state, then gifted or sold for a nominal amount to the occupants when the communist regime was replaced with democratically elected governments. Singapore, third in the world with 90.1% home ownership, instigated a policy of rent to buy public housing units decades ago when they became an independent state in 1965. Prime Minister Lee Kwuan Yew realised early on the importance of home ownership rather than being a tenant in a social housing estate.
In Australia we still have a strong home ownership culture with the rate since 2006, remaining around 70%, according to the Australian Bureau of Statistics. Rents are currently on a par or slightly more than the mortgage payment for the property allowing home owners to buy their own home for what it would cost to rent the same address. While not as attractive to investors who like a positively geared property that brings in cashflow revenue, when combined with the current government incentives such as First Home Owner’s Grants it makes home ownership for owner-occupiers an attractive proposition. Far more attractive today than during the great rate hike experienced in the mid to late 1980s and even more so than the property boom od the first decade of this century. There are professional property buyers agents that can advise you on your property investments.
Owning your own home, even if it is under a mortgage, gives owners a solid foundation on which to grow their personal wealth as well as that vital place to call home. Whether you start in the country with a small apartment or you can swing the deposit on a more upscale city address, buying your own home is always a good thing.