Many people only start thinking about home ownership when they are ready to settle down or start a family, but it can really pay to get a start in the property market much sooner. Buying a home is an investment in an appreciating asset, which means the value of the property will increase over time.

According to recent research by property data company Lightstone, the average period of ownership among first-time buyers is 12 years, and in that period, most owners will have paid o‘ a substantial portion of their bond and generated equity in their property. If you then sell, you can expect to show a positive return on your investment.

Buy vs Rent

The longer you stay in your own home, the more cost-effective ownership becomes when compared to renting. Rental increases generally range from 4% to 10% a year, so your accommodation costs will increase accordingly if you are renting

After a few years of annual rent increases, you will have nothing to show for the high outlay, and if you move out, you leave the property behind. You may even have to foot the bill for restoring the home to its original state.

Bond repayment amounts, on the other hand, depend on current interest rates, which tend to change by much smaller percentages than rentals. Even if interest rates increase over the lifetime of the bond, the monthly instalments are unlikely to increase by as much as 10% - or even 4%. Read more.

Best to all,

Margie, Clare, Fiona, Terry, Alison & Jane

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