New Research Shows Consumers Who Don’t Own A Home Could Be Worse Off in Retirement

By Peter Sarmas on 13 Nov 2017
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Melbourne Auction Results 13th of November 2017

73%
Clearance
Rate

924
Reported
Auctions

Sold at Auction: 551    
Passed in: 370  

 

Sold Before: 122    
Sold After: 1    
Postponed 24  

 

 

Source:REIV

 

Melbourne Market Wrap March 13th November, 2017

The REIV reported 924 properties auctioned this weekend versus 296 last week and 1166 for the same time last year. The clearance rate was 73% which is in-line with last week’s result of 73% and slightly less than the 75% recorded last year for the same time.

Melbourne’s auction clearance rates have been steady in the past month and showing no signs of this market strength slowing down, however there has been a significant increase in the number of properties being sold prior to auction due to stock level increases and fewer buyers.

We are also witnessing a last minute rush for the exit doors by vendors hoping sell before Christmas, however this is not affecting the clearance rates. Vendors who have not sold their property at auction appear to be meeting the market and reducing their expectations on price.

Results in three suburbs over the weekend epitomise the state of Melbourne’s property market at the moment; Reservoir saw only two properties pass in from 15, in Brighton we saw the complete opposite two sales from 10 auctions while Northcote saw two sales from 8 auctions.

 

 

Thinking of buying or selling a home?

Visit our Street Advocate website or send an enquiry below or just call

Peter Sarmas on 0418 740 606

 

Melbourne-Skyline-River(1)

Source: Shuttesrtock

New Research Shows Consumers Who Don’t Own A Home Could Be Worse Off in Retirement

Consumer Research House Roy Morgan released a paper last week where over 50,000 interviews were conducted to determine Australian consumer’s financial behaviour. This study found that Australian households have increased their net wealth over the last four years from $5.7 trillion to $8.1 trillion, an increase of 42.1% from 2013 to 2017.

These findings are timely as the rhetoric and focus on household debt intensifies by the media and property market doomsayers continually talk of a collapse.

The study is unique because it looks at superannuation in the context of all other assets and debt that make up the true financial position of Australian households’, rather than the usual single product or ‘silo’ approach.

The findings of this research were interesting. Household net worth in Australia since 2013 was up $1.387 trillion (57%) as a result of the increase in the equity of owner occupied homes up from 48.1% in 2013.

Superannuation, Pensions/Annuities in total now account for 27.4% of the total, down from 28.6% in 2013. The other components of net wealth, which include bank accounts, managed funds (excluding superannuation) and direct investments, have fallen from 23.3% in 2013 to 19.5% in 2017.

Without getting bogged down in the numbers, the study shows a large gap in ‘net wealth’ between households who own a home and those who don’t.

Mr Morris from Roy Morgan Research says “there are clearly two groups in Australia when it comes to household wealth and its rate of increase. There are those who own or are paying off their home and those who are not. The rapid rise in home values in Australia over the last few years has left those who are not owner occupiers well behind in their share and level of household net wealth.

An insight as to why home ownership is so important in retirement is further explained by Mr Morris saying “Although superannuation funds have increased considerably over recent times, they have grown at a slower rate than the increase in home prices, leaving them holding a lower share than four years ago and currently just over a quarter of household net wealth. This makes it very likely that for some years to come, retirement funding will need to come from household resources outside of superannuation. Those people not in their own home have not made up for it by investing elsewhere, as shown by the fact that they have less in other investments compared to owner occupiers.

Sobering words.

 

RBA Decision and Prediction for Interest Rates

Last week on Melbourne Cup Tuesday the Reserve Bank of Australia met to discuss interest rates.

No surprise the cash rate was left on hold at 1.5% for the 15th month in a row. However the big news was in the fine print released over the next few days by the RBA.

Basically the RBA believes it will take a longer period of time for inflation to start rising therefore the need for interest rates to rise. Expectations to increase rates by a quarter or half a percent don’t look likely until at least until 2019, this despite the Aussie dollar expected to fall further (which will help our trade) and oil prices predicted to rise.

 

Thinking of buying or selling a home?

Visit our Street Advocate website or send an enquiry below or just call

Peter Sarmas on 0418 740 606.

 

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About the Author

Peter Sarmas is a Certified Property Investment Advisor (PIAA) and Vendor/Buyer Advocate. Before becoming the founder of Street News, Peter completed a Degree in Applied Science (Chemistry) and a Graduate Diploma in Property Valuations (Hons). Peter believes property investing is a major and potentially risky undertaking. In his view, everyone should have an independent person acting on their behalf when seeking property investment advice.

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