Home Owners are happier than renters, research shows
The Great Australian Dream is a concept as old as time, and new research has now confirmed owning your own home could in fact be the key to happiness.
According to Finder’s Consumer Sentiment Tracker, a nationally representative survey of more than 30,000 respondents, those who rent report lower levels of happiness and higher levels of money stress than homeowners.
On average 83 percent of homeowners report being happy, compared to 69 percent of renters, the report revealed.
Concerningly, 26 percent of renters admitted they were ‘extremely stressed’ with their financial situation, compared to 15 percent of homeowners.
Sarah Megginson, senior editor of money at Finder, said the data was worrying.
“We know mortgage stress is a real thing, but our research shows renters are struggling the most,” Ms. Megginson said.
But renting itself isn’t what’s making people stressed or unhappy. “Owning a home is correlated with a higher income and cash position, which is leading to higher rates of happiness and financial wellbeing to a certain extent,” she said.
“Renters are more likely to be students, young people starting their careers, or those on lower incomes, which can make it difficult to get into the housing market.
”Finder’s research shows homeowners save around $989 per month, almost twice as much as renters, who save around $516.
When it came to credit cards, renters would take just over nine months to pay off their debt – notably higher than the five months it would take for homeowners, the report showed.
Ms. Megginson said there were longer-term impacts of being unable to save.
“Being in a tricky financial position can mean struggling to pay for bills today, but it also prevents you from investing in your future,” Ms. Megginson said.
Finder’s analysis found homeowners had six times more money invested in shares ($24,732) than renters ($3,762) on average.
But Ms. Megginson said it wasn’t all doom and gloom for renters.
“It is absolutely possible to save for a house deposit while renting, as long as you’re smart about your money where it counts,” Ms. Megginson said.
“Your rent is most likely your biggest expense, so moving to a cheaper suburb or finding a few housemates could help you bring down the cost.
“If you have enough saved up, you could also look at ‘rentvesting’ – renting a home for yourself while owning a more affordable investment property.
“You could also look at buying in partnership with friends to get your foot on the property ladder – just know sharing finances can be tricky,” Ms. Megginson said.
Nicole Madigan December 16th, 2021