How times have changed. A generation ago, jobs were plentiful, homes cheap and the future looked rosy.
Now, young people are finding it hard to even get a job, let alone save a deposit for a home that is likely much smaller but more expensive than what their parents bought.
• In 1985, the median capital city home cost four times the average income; now, it’s eight times.
• In 2002, 36% of under 40s owned a home; by 2014 it was only 25%.
To top it off, the average mortgage debt doubled in that time, so the lucky fewer owners faced a higher burden.
Home ownership is important to being able to retire comfortably; statistics show that those who rent in their old age are more likely to be on the poverty line. But with more expensive property and higher mortgage debts, those who can afford a home put more of their income into paying it off. That’s money that otherwise could have been invested in their super, in shares, in an investment property or a small business. But at least they have an investment – those who can’t get on the property ladder risk missing out on capital gains as time goes on.
So what’s the solution for young people? Well, there’s no silver bullet, but the first step is to see a licensed financial planner. Here at Quest Advisory Group we can help set up a wealth accumulation strategy from today right through to a comfortable retirement in your own home. From strategies such as investment bonds for those saving for a home deposit, to debt reduction methods and superannuation optimisation for homeowners, there are many tools available to ensure your financial future. Contact us today on 1300 120 455.
Quest Advisory Group is a Perth based financial planning firm. We are holistic in our financial planning and can assist with all your needs from budgeting through to investment portfolios and personal protection insurances.
For more information, please contact us on 1300 120 455