Buying a new home is always about you, your family, and your future, even when you don’t have plans to live in it. Investing in property is as much a heart buy as any other home purchase but when it comes down to it: security. With that, buying a new home can provide a uniquely beneficial opportunity for investment in your future. Here are several ways in which a new home can be a wise financial choice.
Building equity
A new build home offers equity-building opportunities that often surpass what you'd find with existing homes. New builds tend to appreciate in value more quickly. When you buy a brand-new home, you're typically starting with the latest design, materials, and technology, which can be especially appealing to buyers. As these features age well, the value of your new home is likely to increase more rapidly than older homes, allowing you to build equity at a faster rate. The more equity that builds in your property over time, leads to increased financial stability and wealth.
Stability and predictability
When you purchase a new home, particularly a ready-built home, you can gain a sense of stability and predictability from the moment you put down your deposit, and right through your entire experience with that property. From stepping out of the shaky renters market (or, if used as an investment, offering a rent solution to someone else while gaining financial stability), to having an equity-building asset for the lifetime of your ownership, buying a home predicts your future financial standing. Even in times of rising interest rates, it is widely considered a preferable position to have your foot in the market, than out of it.
Tax benefits
In Australia, owning a home comes with some potential tax advantages. One of the perks is the Principal Place of Residence (PPR) exemption. This means that if you live in the home you own, you won't have to pay capital gains tax (CGT) when you sell it. This is a big deal because it means you get to keep all the profit you make when your home's value goes up. So, not only do you get a home of your own, you get to enjoy the financial tax-free gains.
Long-term appreciation
Homes historically appreciate in value over the long term, making it a smart investment choice. As the years go on, and the population grows with each generation of homebuyers, more and more people seek homeownership, and the market becomes more competitive. Additionally, the price you purchase a home at today is likely to be far lower than its future price, whether that be a few years from now, or decades. Real estate can be a wise way to invest your money for the long run, for yourself and as a legacy investment for your family.
Retirement planning
Planning for retirement is a lot less daunting if you know you have a viable asset when you stop earning a regular income. When you retire, you can decide to sell your home and use that money to help cover your retirement expenses or use an investment property to be a rental investment for ongoing income. As a homeowner, your property can be a valuable part of your plan for an easy and comfortable retirement.
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