Property ownership is firmly entangled in the Australian dream. It’s become a culturally significant milestone, an indication that the path we’re taking is a solid, tried and tested one.
It’s not surprising that it’s become so culturally and financially significant, especially given a set of stats released by the Australian Bureau of Statistics. What these revealed was that in 2018, property owning households at retirement age (at least one occupant over 65 years old) has a median net worth of $960,000. If there was still a mortgage on the home the median net worth is a bit lower at $934,900.
The statistic that sits so starkly when compared with these is the median net worth of households who rent their property and don’t own it is just $40,800. That’s a significant difference in comfort for homeowners when compared to people who never ventured into buying property.
It’s clear that a lot of our household value sits in our properties, so their value is extremely important to us. Not only is the value of your own home important, the value of your neighbours is too, and everyone else in your suburb. If they sell at a price that less than market value, it’s going to affect your own property value, and your entire household value too as a result.
According to the Household, Income and Labour Dynamics in Australia (HILDA) Survey around two-thirds of Australians own property as of 2018, with the exact portion being 64.3%. 20.9% own other property other than a family home, such as a holiday home or investment.
The deduction is that the family home is clearly the most important asset component. The mean value is $508,758, with a mean value of debt on each home sitting at $124,030. This makes the debt the largest and most important of the debt components. This all points to how reliant we are on the value of our homes as the basis of our household value.
In comparison, only 9.9% of Australians have any wealth tied up in businesses, while 29.3% have some of their value in equities.
What this tells us is clear. Real estate is a massive store of wealth for Australians across the country. The journey of property ownership is desired because it’s a proven method to enhanced household values later on in life. As a result, the value of our homes is extremely important too. If you’d like to talk more about the value of your property, please get in touch with the Henry Wong Team® today. We’d love to answer all your real estate questions.