Should every individual have the right to own their own property? This very question was brought to the spotlight during discussion on negative gearing, with the suggestion that the process only benefited wealthy individuals. Could this be a sign that property is reserved only for a few?
During late April Malcolm Turnbull had this to say about negative gearing and its effect on property ownership in Australia.
Turnbull correctly suggests that negative gearing helps investors own property, with Leigh Sales also asserting that negative gearing is only really used by the highest 10 per cent of income earners. But what does that tell us? That negative gearing is a detriment to society? Or that a majority of earners are not making the most use out of the legal processes in place to get into investment property?
It is our belief that property can be made affordable for everybody. This month, for example, we discussed the concept of Rentvesting and how it can drastically increase the affordability of property. Even somebody on an average income, with a small deposit can be a property owner.
So if almost everybody can afford a property, and the systems in place help support investors, is there actually a problem? There may well be.
The Australian released a report showing how affordable or unaffordable a geographic region is (a comparison between median house values and annual incomes). If you zoom into the Sydney region, unaffordable housing fills the majority of the area. But once again there is a problem with this thinking.
While you might find it difficult to own a property in the traditional sense of saving for a deposit then taking a home loan to live in a property, it may be affordable when you take on a different approach, such as through Rentvesting.
With alternative strategies and your own specific financial circumstances in mind, property can become perfectly attainable if you find the right balance of leverage, location, timing, and expertise. Ultimately it is a fantastic means of achieving your financial goals.
If you’d like more information or a review on your current financial situation, make sure to click below to get in touch.