A recent report from ME Bank shed some light on property investment in Australia.
The overall comfort level regarding investments was 4.92 out of 10, according to the organisation’s Household Financial Comfort Report for December 2013. Unsurprisingly, this number was higher for empty nesters and couples with older children but lower for single parents.
As far as risk appetite was concerned, Australians were described as “relatively cautious” overall.
“Only 18 per cent of households would take above-average risks to earn extra returns: Self-funded retirees have the highest propensity for risk taking at 32 per cent compared to Gen Y and X (both 21 per cent), Baby Boomers (17 per cent) and government funded retirees (10 per cent),” the report stated.
“Men are bigger risk takers than women: 24 per cent of men would take above average risks with their investments compared to 13 per cent of women.”
Perhaps it’s this aversion to risk leading so many Australians to make property a part of their retirement investment plan.
The report detailed that 11 per cent of households reported buying an investment property as a financial goal.
Meanwhile, investing in trades and share accounted for 8 per cent and investing in a business comprised 6 per cent.
Property investment can improve retirement comfort.
The data pertaining to property investment in Australia is especially important since the same report showed that self-funded retirees had a very high financial comfort level at 7.20, while government-funded retirees had an average comfort level of 5.5.
This would seem to indicate the financial freedom and extra income that comes with investment in the property market leads older Australians to feel more confident in their household finances, compared to those who depend on support from government programs.