Owning property has long been referred to as the Great Australian Dream, but research has revealed what we have all long suspected: it’s no longer just a dream, it’s an obsession!
According to 2019 research by HSBC bank, Australians spend an average of 2.5 hours a week focused on property, more than twice the time they spend at the gym (1.08 hours) or speaking to their parents (0.88 hours)!
With the Australian property market worth $9.98 trillion in the June quarter of 2022 following data released by the ABS in September, it’s clear those hours of obsession have turned into a popular source of wealth building for Australians–even despite the market decline from the record-high figure of $10.14 trillion in the March quarter.
In fact, property is an even more popular investment than shares, with the most recent value putting the property market at more than four times the Australian sharemarket–which has a market capitalisation of around $2.47 trillion.
Adrian Kelly, immediate past president of the Real Estate Institute of Australia, says this comes down to Australians viewing property as a “more stable life raft” than the turbulent stock market.
“Many people wary of the stock market’s peaks and valleys are more inclined to put their hard-earned savings into bricks and mortar,” Kelly says, a perspective that grew following the collapse of the stock market in the early 2000s.
Following the GFC, the notion of a stable property market began to strengthen, as Australians–and the RBA–recognised the role housing and housing finance institutions could play in helping to prevent future crises.
This has caused a degree of concern among younger buyers and some policy makers, who argue that property’s generous tax breaks turn something as basic as shelter into an unaffordable, speculative asset class. Many baby boomers, who retired before they could make the most of the superannuation scheme that was introduced in 1992, claim they are investing in property to make up for a lack of retirement funds.
In any case, more and more Australians are jumping on board the wealth-building potential of property.