May 08, 2014
Rent or buy?
The wealth effects of owning stack up says Richmond home loan expert
Australians love property – and with good reason. Owning your home offers
security, a sense of community and the wealth benefits of owning an
The trouble is, today’s rising property market is making it challenging for first
home buyers especially in Sydney - Australia’s most expensive city. The latest
figures from research group RP Data show the median house price in Sydney is
now a whopping $775,000.
Faced with price tags like that, it’s hardly surprising many would-be first home
buyers toss in the towel and opt to rent long term.
To be fair, renting can have its upsides. There’s the freedom to move frequently;
tenants face none of the costs of home maintenance; and it can be cheaper to
rent in some (though not all) areas than it is to pay off a home.
Renters can be left behind
But – and it’s a big but, home ownership is an outstanding form of forced
saving. A home loan obliges us to pay off a significant asset (our home), which
rises in value over time while the balance of our mortgage steadily declines.
Without the benefit of that forced saving, renters can easily be left behind when
it comes to personal wealth.
As evidence of this, a 2013 report by the Australian Bureau of Statistics
found home owners without a mortgage have average personal worth of
$1,237,000. Home owners still paying off their home have net wealth averaging
$790,000. And at the far end of the scale, the average worth of renters is just
I reckon it’s a pretty compelling argument for home ownership.
Richmond home prices remain affordable
The thing is, here in the Hawkesbury, the goal of home ownership is far more
achievable than in many parts of Sydney. That’s because along with a vibrant
community and our wonderful semi-rural lifestyle, the Hawkesbury offers very
affordable home prices.
As a guide, property listing site realetate.com.au says the median house price
in Richmond is $456,000. A short drive away in Windsor, the median house price is $475,000.
No wonder both Richmond and Windsor are described as ‘high demand’ areas.
Let’s make it happen
If you’re a first home buyer in Richmond or Windsor, it could be worth taking
advantage of today’s low interest rates to get a foothold in the property market
before property values rise further.
Saving for the traditional 20% deposit isn’t easy. But the team of home loan
experts at Mortgage Choice Richmond can explain a variety of strategies that
can get you off the rental treadmill and into your own home sooner even if you
don’t have substantial savings.
Discover what’s possible. Call your team of Richmond and Windsor home loan
experts today on 4578 9904 or 0411 550 600 at any time. Or send your email to
Be sure to share our blog on Facebook and Twitter and let others join the conversation.
See our video log for more information:
 ABS Cat 6554.0 - Household Wealth and Wealth Distribution, Australia, 2011–12, 21 August 2013.