Key benefits of home ownership
Gain financial wealth, better education for your children and a general improvement in household health through home ownership
Home ownership has the unique potential to provide for a more stable and prosperous future for you and your family. There is also good news you may not know about regarding health and education benefits for you and your family.
Owning your home is a big step towards financial freedom and provides wealth-building opportunities that would not necessarily have been available to you previously.
The key to this is Home Equity – Home Equity is the difference between the home’s current market value (the price at which the house could be sold) and the outstanding balance on the home loan.
For example – Let’s say you have a balance of R200,000 left on your home loan, but the property is valued at R350,000. You have R150,000 worth of home equity!
“Historically house prices increased by 11.25% annually from 1966 to 2012”
Source: ABSA Annual Average House Price Index
This is the historic performance of house prices but what about the future.
No one can determine exactly what future house price growth will be, but significant supply and demand factors indicate that prices are likely to grow at least at the rate of inflation, currently targeted at between 3% and 6%.
One significant factor that drives up the demand and cost of products and goods is urbanisation.
This occurs when people move from rural areas into cities, often motivated by economic factors such as better job opportunities.
“As cities develop, effects can include a dramatic increase and change in costs of goods”
Source: Wikipedia The Free Encyclopedia
Since land in our larger cities is increasingly scarce, the sooner you become a homeowner, the sooner you are likely to benefit and create wealth.
With research indicating a general improvement in household health, it’s fair to conclude that having a place to call home rewards the whole family.
If you’ve ever lived in crowded conditions you’ll know how fast infections spread, so you’ll welcome the immediate improvement once in your own hygienic environment.
“In addition to being more satisfied with their own personal situation, homeowners also enjoy better health”
Source: WM Rohe, S Van Zandt and G McCarthy
Home ownership gives you the ability to control your immediate environment.
The equity in your home loan also gives you more buying power, allowing you access to funds for unforeseen medical emergencies.
Education for the future
Apart from the privacy and security a home provides allowing children to study without distraction, the children of homeowners perform better at school and are more likely to continue studies after school to get a tertiary qualification.
Children from families who own their own homes perform far better at school and are more socially balanced.
Source: Habitat for humanity