Superannuation might seem like a great idea to allow Aussies to retire with dignity, but CIS research director Simon Cowan feels that those who own their homes find it far easier than those who have money in their super. While the rate Australians are forced to allocate to their superannuation is 9.5%, this may increase to 12% by 2025. This makes it far more difficult for people to purchase their first property. But for those who can afford to cut down on expenses and enter the property market as soon as possible, the rewards speak for themselves.
Property Stocks Climb Reveals Confidence
Property prices have dropped and buyers are drying up as lending criteria increases on the housing front, but this doesn’t prevent the Australian property stocks from climbing. While this is an anomaly, it also indicates a level of trust that investors have in the quality of the stocks that they’re purchasing. For those looking to purchase property, the level of confidence is reassuring, as this means that their money is going towards a solid asset. While it may come as a surprise after the 2008 global mortgage crisis, this is good news for those hoping to use their property as a safety net in retirement.
Retired Home Owners Enjoy Benefits
One of the most enjoyable benefits a retired homeowner has is the fact that they’re shielded from rising house costs. In order to make the most of their property, homeowners are recommended to pay off their mortgages before they retire. This allows them to easily absorb the drop in income that so often happens when they leave the workforce. For retirees, a mortgage-free property opens up a whole range of possibilities in the event that they’re running short on cash, and financing the equity is just the start of it. Homeowners also have the option to sell their property should they become cash strapped.
Purchasing The Right Property Could Be A Lifetime Deal
Whether retirees have saved up to purchase a property in a retirement estate or are simply using the proceeds of the sale of their existing property, there are innumerable benefits to buying in the right place. Retirement villages have proven to be quite affordable, and an apartment costs on average only 64% of the median price of a two-bedroom property. These villages also tend to offer additional services such as on-site medical assistance, leisure facilities, social programs, and more.
Property is still the asset of choice when going into retirement, as it offers so many benefits to retirees. While the superannuation might provide a portion of the income needed at retirement, nothing beats living rent-free.
