New Home Owners Gain $180,000 In Six Months
Savers in the meantime are losing out.
Savers in the meantime are losing out.
Homeowners who purchased property six months ago are up to $180,000 better off than if they had invested their savings elsewhere, a new analysis by Canstar reveals.
The research shows that if a Sydneysider bought a house for the median price of 1,112 671 in March with a 20% deposit of 222,534 the value of their property would have risen by 16.3% by last month. In dollar terms that equals a massive $181, 365 by last month.
The same 20% deposit invested in a six-month term deposit at the highest interest rate of the time – 0.99% — would have just earned $2203 in comparison. A stark difference.
Alternatively, if the same amount was investing in the Australian sharemarket, shares would have grown by 10.02% — a robust difference over the savings account yet nothing when compared to the increases in property investment.
It’s not only a Sydney story either. In Melbourne where a homeowner who invested in a house with a 20% deposit of $171,819 based on the median price of $859,097 back in March would have gained a 10% rise of $85,910 by September.
In a term deposit savers would have only earned $1701 and in the sharemarket a comparatively low $17,216.
According to Canstar’s finance expert Steve Mickenbecker, it’s apples and oranges when comparing the value found in housing and term deposits.
“Housing and term deposits are chalk and cheese when it comes to investing surplus savings. Both can form part of an investment portfolio but they perform different functions,” says Mickenbecker.
Yet there are pros and cons to both forms of investment.
“Term deposits are low risk, with a government guarantee for a total up to $250,000 with any one bank, while house prices can fall,” he said.
“Housing as an investment lacks the flexibility of cash in the bank. You can’t cash in $30,000 of the house to cover living expenses, and the sale of the property can become protracted.’
Chris Dixon, a partner who led the charge, says he has a ‘very long-term horizon’
Americans now think they need at least $1.25 million for retirement, a 20% increase from a year ago, according to a survey by Northwestern Mutual
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Released last year, this is the third volume from award-winning interior designer Greg Natale. Different in format from his earlier books, the eight projects featured are Australian but with a slight Euro-centric focus. The writing is conversational, almost intimate, inviting the reader into the most luxurious spaces beautifully captured by photographer Anson Smart. This coffee table tome is perfect for dreamers and doers alike. Rizzoli, $110
What this ‘median’ 7-figure price tag scores across Australia.
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