Have We Lost The Plot?

Private Property South Africa
Lea Jacobs

There are so many good reasons to invest in a property of your own, but unfortunately we seem to have lost sight of the benefits and turned our focus on the negative. Conversations in sitting rooms around the country these days tend to revolve around the dangers and high costs associated with buying a home of your own, but does the argument hold any water, or is investing in real estate still one of the best decisions you can ever make?

"Since the financial crisis that took the world in 2008, there has been so much said about property as a good or bad investment - so much analysis, discussion and dissection - that there is a danger of forgetting that what the real estate market is really about is the individual, human benefits of home ownership," says Berry Everitt, MD of the Chas Everitt International group.

He is absolutely right. Somewhere along the line, we have taken our eye off the ball and allowed fears, whether real or imagined, to dominate our thoughts, forgetting the most important aspect of all - property ownership is part and parcel of life for millions of people.

The benefits of home ownership far outweigh the drawbacks and yes, while the decision to buy a property is a big one, generally the long-term advantages outweigh the negatives and make owning your own home one of the best financially sound decisions you ever take.

Everitt believes that it's time to re-focus on these benefits, "the first of them being, as shown in many studies over the years, that homeowners are happier in their homes and in their neighbourhoods than tenants.

Interestingly, he also notes that the children of homeowners have been shown to do better in school, have more chance of obtaining a tertiary qualification, have less problems with alcohol or drugs, and earn more in their own adult lives than do the children of those who remain tenants.

"This is probably not that surprising, since home ownership also provides social stability, and makes for better neighbourhoods. Those with a longer-term stake in their area are of course more likely to participate in local organisations and work for the good of their community through schools, churches, blockwatch and ratepayer associations.

And generally, Everitt says, neighbourhoods with high rates of home ownership will ‘give back’ to those owners in terms of lower crime rates, better schools, more demand from future homebuyers and higher property values.

"Which brings us back to finances - but not just to the cold 'investment value' of property ownership. There is a warm truth to the fact that homeownership, unlike tenancy, enables individuals and families to create wealth with which to better their own lives and those of the people they care about.

"Just by paying off their home loan (instead of paying rent) they can build up equity that can then be used to educate children, start a new business or provide for their own retirement - all prospects that are much more 'real' and enduring for most prospective homebuyers than the possibility of making a killing in the next property boom."

A report in a British newspaper recently noted that the younger generation in that country only save for a deposit for three years. If, after that time, there still isn't enough money in the bank, they give up the dream and remain tenants.

It has often been said that the most common reason people get into debt is due to the instant gratification habit that seems to rule the world these days. The 'I want it all and I want it now' mindset has not done the younger generation any favours and those who have clear goals and who are dedicated to securing a better life for themselves in the long term need to understand that the good things in life really are worth waiting for.

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