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Source:  AFS   1 March 2020  by Nila Sweeney 

More than three-quarters of homes auctioned on the weekend were sold as the strong housing market continued, even as initial signs emerge that the coronavirus could nip the burgeoning boom in the bud.

Across the capital cities, the preliminary clearance rate showed 77.1 per cent of properties sold on a weekend with 16.53 per cent more auctions than the week before.

In Sydney, the preliminary auction clearance rate surged to 81.4 per cent, up from the 74.5 per cent final clearance rate achieved the week before. There were 1045 homes taken to auction – up 8.51 per cent from last week.

Melbourne recorded its busiest auction week since October 2018, with 1567 homes going under the hammer. Preliminary auction numbers showed 77.1 per cent were cleared, up from the 76.1 per cent final clearance rate achieved the week before.

"We saw quite a significant increase in the amount of activity over last week, particularly in Melbourne," said CoreLogic analyst Kevin Brogan.

"When you have a market that busy, it does test the depth of the market because if you don't have enough purchasers, it will push the clearance rate down. A 77.1 per cent clearance rate is a very strong result for Melbourne."

In smaller markets, Brisbane recorded a 63.2 per cent clearance rate, a sign that the market is heating up. Typically, a clearance rate in the mid-40s is considered a good result for Brisbane, Mr Brogan said.

In Adelaide, 62.7 per cent of the auctioned homes were sold, Canberra cleared 67.7 per cent and Perth sold 37.5 per cent.

Melbourne-based buyer's agent David Morrell of Morrell and Koren said that while the city has passed the test in terms of achieving high clearance rate amid rising listings, some buyers were starting to hold back in expectation prices could fall lower if coronavirus gets out of hand.

"There's certainly some caution in the market. I was booked to go and bid for five properties on Saturday but my clients cancelled two of those at the last minute because of the virus. They decided there's too much uncertainty at the moment," he said.

"A lot of vendors are probably concerned about putting their properties on the market, too. You can feel it out there. It's on people's minds, but it hasn't reflected in the property market yet."

In Sydney, selling agent Shannan Whitney, director of BresicWhitney said while there was still a lot of heat in the market, people were watching the virus situation very closely.

"I think naturally people will pause. I think people will want to see where this might lead to. In terms of our listing pipeline, we haven't seen any major disruption yet."

AMP Capital chief economist Shane Oliver said there's a risk that the coronavirus could intensify and this would pose a risk to the property market over the next few months.

"Indirectly, the property market will be impacted if people lose their jobs but also when people are faced with a health crisis, they tend to put off unnecessary decisions like buying a new house or trading up," he said.

"It is perhaps the biggest threat to the property market. If it can affect the share market like it has, then it can affect the property market at some point."

Louis Christopher, managing director of SQM Research said that there's a risk that the market would seize up if Australia starts seeing a large scale human to human transmission of COVID-19.

"This is a scenario where the housing market freezes up because people will avoid going to places of congregation and that would include going to property inspections and auctions. This will have the potential to cut the housing boom short," he said.

"If the economy goes into recession as a result of the coronavirus, all bets are off.  Recessions are bad for real estate because unemployment will rise and that would be a big negative for the housing market."

Source:  AFS   1 March 2020  by Nila Sweeney 

More than three-quarters of homes auctioned on the weekend were sold as the strong housing market continued, even as initial signs emerge that the coronavirus could nip the burgeoning boom in the bud.

Across the capital cities, the preliminary clearance rate showed 77.1 per cent of properties sold on a weekend with 16.53 per cent more auctions than the week before.

In Sydney, the preliminary auction clearance rate surged to 81.4 per cent, up from the 74.5 per cent final clearance rate achieved the week before. There were 1045 homes taken to auction – up 8.51 per cent from last week.

Melbourne recorded its busiest auction week since October 2018, with 1567 homes going under the hammer. Preliminary auction numbers showed 77.1 per cent were cleared, up from the 76.1 per cent final clearance rate achieved the week before.

"We saw quite a significant increase in the amount of activity over last week, particularly in Melbourne," said CoreLogic analyst Kevin Brogan.

"When you have a market that busy, it does test the depth of the market because if you don't have enough purchasers, it will push the clearance rate down. A 77.1 per cent clearance rate is a very strong result for Melbourne."

In smaller markets, Brisbane recorded a 63.2 per cent clearance rate, a sign that the market is heating up. Typically, a clearance rate in the mid-40s is considered a good result for Brisbane, Mr Brogan said.

In Adelaide, 62.7 per cent of the auctioned homes were sold, Canberra cleared 67.7 per cent and Perth sold 37.5 per cent.

Melbourne-based buyer's agent David Morrell of Morrell and Koren said that while the city has passed the test in terms of achieving high clearance rate amid rising listings, some buyers were starting to hold back in expectation prices could fall lower if coronavirus gets out of hand.

"There's certainly some caution in the market. I was booked to go and bid for five properties on Saturday but my clients cancelled two of those at the last minute because of the virus. They decided there's too much uncertainty at the moment," he said.

"A lot of vendors are probably concerned about putting their properties on the market, too. You can feel it out there. It's on people's minds, but it hasn't reflected in the property market yet."

In Sydney, selling agent Shannan Whitney, director of BresicWhitney said while there was still a lot of heat in the market, people were watching the virus situation very closely.

"I think naturally people will pause. I think people will want to see where this might lead to. In terms of our listing pipeline, we haven't seen any major disruption yet."

AMP Capital chief economist Shane Oliver said there's a risk that the coronavirus could intensify and this would pose a risk to the property market over the next few months.

"Indirectly, the property market will be impacted if people lose their jobs but also when people are faced with a health crisis, they tend to put off unnecessary decisions like buying a new house or trading up," he said.

"It is perhaps the biggest threat to the property market. If it can affect the share market like it has, then it can affect the property market at some point."

Louis Christopher, managing director of SQM Research said that there's a risk that the market would seize up if Australia starts seeing a large scale human to human transmission of COVID-19.

"This is a scenario where the housing market freezes up because people will avoid going to places of congregation and that would include going to property inspections and auctions. This will have the potential to cut the housing boom short," he said.

"If the economy goes into recession as a result of the coronavirus, all bets are off.  Recessions are bad for real estate because unemployment will rise and that would be a big negative for the housing market."

Source:  ABC News  1 January 2020

For decades, Australians living abroad have been able to claim the capital gains tax (CGT) exemption on the family home.

Key points:
– The Federal Government saw the controversial law pass through the Senate in early December
– The change means thousands of Australian expats could be up for hefty capital gains tax bills
– Tax experts argue the measure is draconian and may force expats to return to Australia and sell their homes before June 30

This exemption was available so long as the home was rented out for no more than six years at a time.  But in early December the Federal Government finally passed through the Senate its $581 million plan to change CGT arrangements for people living overseas.  The law basically eliminates the CGT exemption for Australian expatriates that has been in place since September 20, 1985.  It means that potentially thousands of Australians will be hit with capital gains tax if they sold their property while a resident overseas, and the tax bill will date back from the time the owner purchased their home, not the point at which they moved overseas. 

For someone who purchased in the late 1980s, that could mean a hefty tax bill.  But under the law, foreign residents who already held property on May 9, 2017 will be able to claim the CGT main residence exemption, if they sell their property on or before June 30, 2020. 

The changes, first flagged in the 2017-18 federal budget, had received much criticism from the expat community and their advisers, causing the Federal Government to delay the proposed measures until after the election.  But Federal Treasurer Josh Frydenberg told ABC News in July that proposed change “remains our Government’s policy” when asked if it would still proceed.

KPMG tax partner Mardi Heinrich said the policy measure’s pathway through the parliamentary process had been “tortuous”.  “The impact will fall on Australians living overseas currently, or in the future, who sell their Australian main residence while living overseas,” Ms Heinrich said. “It will also apply to foreign nationals who buy a home in Australia to live in while working here, which they then sell after returning to their home country.”  “Furthermore, it will impact Australians who ordinarily live overseas and have their main residence overseas, but who come to reside in Australia for a temporary period.”  The Tax Institute’s senior tax counsel Bob Deutsch called it an “outrageous piece of legislation”.  “No one knows how many people are likely to be affected by these draconian measures, but it will certainly be in the thousands,” he wrote in a blog that he shared with ABC News.  “If we are genuine in wanting to build an agile, innovative workforce we have to do better than this.”

Atlas Wealth Management managing director Brett Evans said a high number of Australian expats would get caught out because many won’t be aware the previous six-year temporary absence rule was no longer applicable.  “In our daily discussions with Australian expats, very few people are aware of what has been proposed,” he said.

The Federal Government made some amendments to its original 2017 proposal that provide taxpayers with exceptions based on certain ‘life events’ such a terminal medical condition, death or divorce. “The hardship relief will only apply where an individual has been a foreign resident for a period of six continuous years or less, and only in very limited and unfortunate circumstances,” Ms Heinrich said. It would also be available if the resident moves back into their home before putting it on the market, she said.

RSM Australia associate director, tax services, Tracey Dunn told ABC News the exemption was unclear in the case of a divorce.  “The legislation and the explanatory memorandum are silent on the impact on Australian tax residents who obtain the ownership interest in a dwelling from a former spouse who subsequently becomes a foreign resident,” Ms Dunn said.  She said if the property is not transferred in accordance with Tax Act, and the spouse transferring it is a foreign resident at the time of the transfer, the Australian resident spouse will only be eligible for a partial main residence exemption on the later sale of the property.  Meanwhile, the foreign resident transferring the property will be ineligible to claim the main residence exemption relating to their period of ownership and the ‘life event’ will not be covered by the Act, she said.  “This is an absurd outcome, particularly considering the dwelling may have been the family home for the entire period of ownership,” Ms Dunn said.

Robyn Jacobson, senior tax trainer at TaxBanter, who had been campaigning against the law, said despite the amendments based on certain life events, major problems existed.  She said the biggest issue was that most people had not kept adequate records about expenses related to property purchases that may date back to the late 1980s.    “The issue is that in calculating the capital gain it [the law] is based on the original cost base,” she said.  “And in many cases adequate record keeping will have not been maintained and people will not be able to establish what their cost base is,” Ms Jacobson added.  “This includes not just the original purchase price, but acquisition costs, holding costs and improvements to the family home.”  Ms Dunn was also concerned that many taxpayers would not have retained CGT records to properly work out their cost base.  “The Government repeatedly ignored calls to allow for a market value uplift for foreign residents on exiting Australia,” Ms Dunn said.  “Unless the Commissioner of Taxation uses his administrative powers to enable former residents to estimate the cost base of their property on a reasonable basis, many former Australians may be unfairly ‘over taxed’,” she said.

To demonstrate how the law change would impact expats, Mr Deutsch gave the example of a fictional couple, Elizabeth and Barry, who purchased a home in Melbourne in Elizabeth’s name on April 1, 1991 for $1.2 million.  In January 2019, Elizabeth gets offered a senior position in a bank in England on an initial two-year contract but renewable by joint agreement.  She accepts and the couple leave for England in April 2019, while renting out the property on a one-year lease.  The job turns out to be a perfect fit and Barry has also found a job in England, so the couple decide to stay there permanently.    On April 1, 2021, the Melbourne property is sold for $4.6 million.  “As a result of the law, if Elizabeth is a foreign resident at the time of sale, which is likely on these facts, she will, quite absurdly, be denied the benefit of the main residence exemption,” Mr Deutsch said.  He said her capital gain based on one of two ways of assessing it, would be $1.8 million ($4.6 million minus $1.2 million reduced by 46.67 per cent).  An alternative, he said, would be for Elizabeth to have come back to Australia and re-establish her Australian residency for the sole purpose of allowing her to sell her property free of a CGT liability, or at the very least a reduced liability.  But he said this posed a “logistical nightmare” and raised a further question as to whether general anti-avoidance rules may apply.  “The scheme gives rise to a tax benefit in the form of an exemption which would not have applied but for her manoeuvre,” he said.   “All this can leave some advisers to expatriates like Elizabeth in quite some quandary as to what exactly is the best advice to give in such cases,” Mr Deutsch said. “In addition, as Elizabeth will be taxed on the capital gain calculated using the original cost base, she will need to have kept accurate records of her purchase.”  He said this was unlikely given her property purchase dated back to 1991.

Australian Taxation Office Reference Links:

 Capital gains tax changes for foreign investors
https://www.ato.gov.au/General/New-legislation/In-detail/Direct-taxes/Income-tax-on-capital-gains/Capital-gains-tax-changes-for-foreign-investors/

Foreign residents and main residence exemption
https://www.ato.gov.au/general/capital-gains-tax/international-issues/Foreign-residents-and-main-residence-exemption/

Source:   Jessica Irvine is a senior economics writer with The Sydney Morning Herald 16 February 2020

Sydneysiders hold the dubious honour of being Australia's mortgage moguls, with remaining debts 30 per cent higher than the national average.

The average Sydney mortgage now weighs in at $365,873 across all mortgage-holding households, including those who bought decades ago, according to analysis by the Grattan Institute.

The analysis shows the national average for all outstanding principal mortgages, excluding investment loans, now stands at $280,912, prompting fresh warnings authorities will have to impose speed limits on mortgage growth within the next six months.

The figures reveal it is younger Australians who shoulder the highest mortgage burdens, having had less time in which to pay them down. Nationally, households where the reference person is aged 35 to 44 shoulder the biggest mortgage debt of any age group, at an average of $353,087 a household.

But the figures also suggest some older households are taking significant mortgages into retirement, with the average mortgage of a household aged 65 to 74 sitting at $135,884.

However, the typical or "median" debt of these households is much lower at $46,187, suggesting a smaller number of households with large debts skewing the results.

The figures are drawn from the Australian Bureau of Statistics' latest survey of household income and wealth, and include all mortgages on principal residences - excluding investment debt.

The Grattan Institute's Brendan Coates said separate Reserve Bank data on mortgage credit confirmed the total mortgage debt owed by Australians had not changed since that last survey.

"New borrowers are taking out larger mortgages, but existing borrowers have been pocketing the savings from recent interest rate and tax cuts to pay down their mortgages," Mr Coates said.

Amid fears that borrowers are over-extending themselves, the analysis shows higher income households are shouldering most of the debt.

The average mortgage of a household earning in the top fifth of all households by income - an annual household income of $167,805 gets you into this club - stands at $374,153.

Mr Coates said the rapid growth in the size of new loans - up 16 per cent over the year - would worry the Reserve Bank and likely prompt regulator action to curb new lending.

"With interest rates set to remain at record lows and house prices rising rapidly, chances are we'll be talking about reinstating 'macro-prudential rules' - restrictions on how much banks could lend - again inside the next six months."

"Household debt to income remains very high, and that increases the kind of financial risks that prompted APRA to act last time around when they capped interest-only lending and lending to property investors, as well as rules governing how much buyers could borrow based on their incomes."

Separately, figures released last week showed the average new mortgage being written has ballooned to $500,000 nationally. Commsec chief economist, Craig James, said the build up in debt was a "risk" for the economy.

"The Reserve Bank is clearly watching it very carefully," he said. However, higher home values were underpinning higher debts. "It's not like everyone is going out and buying a Maserati with the money - they're buying an asset which appreciates in value. It's a positive thing."

Graham Cooke, insights manager at comparison website Finder, said super-sized mortgages meant super-sized savings for borrowers who shop around.

Many lenders are offering mortgages with a "2" in front, Mr Cooke said, including Reduce (2.69 per cent), Well Home Loans (2.72 per cent), Home Star (2.74 per cent), UBank (2.84 per cent), Athena (2.84 per cent), loans.com.au (2.88 per cent), Mortgage House (2.88 per cent) and HSBC (2.95 per cent).

"A small reduction to your home loan interest rate could lead to substantial savings in the long run," Mr Cooke said.

Source:  Property Observer  (Staff Writer) 21 January 2020

NAB data mapping suggests that the ABS retail trade measure will fall 0.1% m/m in December following a gain of 0.9% in November. 

The ABS printed a 0.9% gain in November, while NAB forecast 0.6% (revised to 0.5%). The strong November print is likely a result of the relatively new Black Friday sales bringing forward Christmas spending into November. 

Beyond technical questions around seasonal factors, this points to ongoing weakness in the retail sector amid high consumer debt levels and sluggish wage growth.

It is unlikely that the sector will see a sustained lift any time soon. On the contrary, the catastrophic bushfire season may further damage consumer confidence in January and February.

NAB Group Chief Economist Alan Oster said, "the retail sector has numerous fundamental issues; unemployment is set to edge higher, sluggish wage growth and elevated consumer debt continue to dampen consumer sentiment, despite interest rate cuts and higher house and share prices."

"In parallel to our standard mapping equations, we are running an experimental methodology. This alternative methodology forecast a bigger rise in November and an even weaker result in December."

"If anything, our December forecast has downside risk."

"The current bushfire season – underway since September – is a national tragedy. The local economic impact in bushfire-affected areas has been extreme."

"While it is unlikely that the fires were a major influence on the national December retail data, there may be much more substantial second round impacts in January and February," he concluded.

 Source:  Property Observer  (Staff Writer) 10 February 2020  

EARLY MOVER INVESTORS

The authority is aiming to have the agribusiness and manufacturing precincts up and running by the time the airport opens in December 2026. Several businesses in those sectors have committed to build facilities in the area, including advanced 3D-printing company GE Additive, Australian vitamin and pharmaceutical maker Vitex, along with the Australian Space Agency and 18 SMEs in aerospace.

Additionally, aerospace company Northrop Grumman has committed to an AUD 50 million investment in an advanced defence electronics maintenance and sustainment centre. Japanese multinationals Mitsubishi Heavy Industries and the Sumitomo Mitsui Financial Group have also agreed to invest in the aerotropolis. The state’s largest wholesale produce market, Sydney Markets, has signed an agreement to expand into the aerotropolis. And to help supply the skilled workforce needed for many of these businesses and others in the region, the University of Newcastle, University of NSW, University of Wollongong, and Western Sydney University plan to join forces to create a world-class, higher education institution at the aerotropolis.

State and federal governments have committed AUD 20 billion to build Western Sydney’s new airport and all the associated transport infrastructure, yet the NSW government estimates that to build out all of the development required in Western Sydney – the airport and aerotropolis, the transport infrastructure, housing, schools, hospitals and so on – will cost more than AUD 100 billion.

WHERE OPPORTUNITIES AWAIT

The remaining AUD 80 billion will come from the private sector and this presents a huge opportunity for investors, in property, in business, in infrastructure – and even as potential owners of the airport should the government eventually privatise it, says Roddy Adams, Head of Energy, Infrastructure & Resources NSW at Westpac.

ACCOMMODATING POPULATION GROWTH

A huge amount of investment will be required to house the population of the rapidly growing Western Parkland City, as the government has tagged the region. In a Westpac-commissioned report titled Western Sydney Infrastructure Projects and Investment Opportunities, The Root Partnership has identified what will need to be built in the two decades to 2036 to accommodate the rapid growth: Roddy Adams, Head of Energy, Infrastructure & Resources NSW at Westpac, notes that the airport has been structured as a stand-alone corporation, Western Sydney Airport. While nothing has been confirmed, Adams believes the government may put the airport up for sale once it is operating, providing another opportunity for investors in the region.

“It would make sense for them to recycle their money once the airport's up and running because that's how it was with every other airport in Australia,” he says.

Additionally, while the federal government has committed AUD 5.3 billion to the airport, Adams says most observers believe that to bring it up to the standards of an international class airport total investment will be more like AUD 10 billion, suggesting the government will have to raise additional cash, or sell off the airport in stages to fund its continued development.

He expects the airport to attract interest from the superannuation sector, which is drawn to the stable, long-term cashflow that comes with many major infrastructure investments. It won’t just be multibillion-dollar, headline-grabbing projects which create opportunities for investors. Adams says the knock-on effects for the whole region will be quite profound. There are also investment opportunities in the aerotropolis itself, which will host industry and manufacturing, and logistics centres designed to take advantage of the new airport – and it will be home to new communities, parklands, cultural and sporting centres, shopping centres, schools, childcare centres, universities, aged care facilities, healthcare and hospitals.

Investors have the capacity to put money into the aerotropolis both by establishing businesses in the precinct and by funding its development, plus they will have the chance to either buy land or acquire long-term leases as well. Obvious candidates to set up in the aerotropolis include logistics and supply chain businesses and those involved in agribusiness. “You don't have to think too hard down that line to come up with a whole range of people, both from an industrial or other institutional equity perspective, who’ll be keen to look into this,” says Adams.

Westpac will be involved in facilitating the region’s growth both as a member of the community which has had branches in the region since the early 1900s and as a facilitator of opportunities for corporate and institutional clients.

Adams says, "we want to help the aerotropolis drive as much value into the business supply chains locally as we can as well."

“This is one of the biggest growth opportunities that the bank currently has on its radar,” he concluded

Source:  Property Observer  (Staff Writer) 21 January 2020 

Situated at 52-54 McFarlane Street, the 12,418 sqm site sits in the heart of the Merrylands town centre, adjacent to one of Stockland’s top-performing shopping centres.

Acquired from Stockland for $41 million, the site is currently DA-approved for the construction of five high-density towers that will comprise 562 residential apartments, as well as approximately 4,500 sqm of ground level retail and basement parking.

Picture on home page link is a render of the previous owner's plans for the Merryland site (Source: https://www.commercialrealestate.com.au).

Following the DA approval, the Merrylands Town Centre planning controls have been amended and as such Coronation is also exploring increased yield at the site, says Managing Director, Joseph Nahas.

“Our goal is to deliver a mixed-use precinct with a combination of build-to-rent and build-to-sell apartments, as well as a bustling new retail offering for the community that will include a gym, supermarket and a wide variety of food and beverage vendors,” said Managing Director, Joseph Nahas

On the topic of build-to-rent, Mr Nahas says Coronation Property is backing the concept to succeed in Australia, adding that he saw the site as a "seed investment" for their build-to-rent business.

Coronation aim to deliver 5,000 apartments over the next seven years and play a leading roles in built-to-rent for Australia.

Source:   Nina Hendy with The Sydney Morning Herald 14 January 2020

 Fed-up millennials fear they may never be able to save enough money to buy a home, leaving an entire generation disenfranchised by the property market. Those born between 1976 and 1990 reveal that getting over the first hurdle of saving the often-required 20 per cent deposit is putting home ownership beyond their reach.

An ongoing housing affordability crisis is entrenching a generation dependent on parents to help them to get a foot on the property ladder, with the number of millennials giving up hope of moving out of home by age 30 years surging to 34 per cent, the Perceptions of Housing Affordability report by CoreLogic found.

"The ‘cubby house' syndrome – where children are prolonging their home stay with parents – is intensifying," says CoreLogic International chief executive Lisa Claes. "Our youngest generation is effectively being locked out of the market and increasing dependency on parents."

"If millennials' affordability disillusionment continues, we risk entrenching a generation who become disenfranchised from society. It raises serious issues around intergenerational equity and should be a catalyst for policymakers to address [housing] affordability," she says.

Despite the challenges, the great Australian dream of home ownership burns brightly, with 94 per cent rating it as important, according to a report by Gateway Bank and Genworth Insurance. However, it now takes a typical household about 8.7 years to save the necessary 20 per cent home deposit, CoreLogic found.

Millennial Olivia Gotch is hopeful she can save enough to buy a one-bedroom flat in Sydney's Lower North Shore.

The 27-year-old, who works in advertising, lives at home with her parents and is diligently putting away as much cash as she can for a place she can call her own. My bank wanted me to clear my car loan and credit card before approving me, so I've been focused on doing what I can to meet their criteria," Gotch says.

"It's been a tough process but being at home has allowed me to save," she says.

Home ownership has always been a struggle for younger Australians, with lower incomes and less accumulated savings, Grattan Institute's program director of household finances Brendan Coates says.

Between 1981 and 2016, home ownership rates among 25 to 34 year olds fell from more than 60 per cent to 45 per cent. Home ownership matters because it had been built into many aspects of Australian life. Much public policy assumes that most people will own their own home, including retirement incomes and access to finance," he says.

However, are homeowners really financially better off by retirement than renters? And is renting really "dead money"?

Home ownership has long been seen as a highway to wealth creation, in part because tax and welfare laws treat it more favourably than other investments, Coates says.

"Whether home ownership or renting is the better path forward ultimately depends on future rent and house price movements, which are impossible to predict," he says.

"Homeowners tend to save more and build wealth, although it's difficult to determine whether this is because taking on a mortgage imposes savings discipline, or because households with better savings discipline are more likely to buy their home," he says.

Traditionally, the belief is that people rent because they can't afford to buy where they want to live.

However, researchers at EY recently set out to explore whether it is time we changed the narrative around rent versus buy, based on data from the past two decades. Its report revealed that many people could be better off renting permanently than buying, if policy settings supported their choice. Government reform is needed to change this roadblock and make renting a more feasible option for greater stability in tenancies, they concluded. While the research found that two out of three Sydney residents think renting is a waste of money, economic modelling tells a different story.

In the model, two home seekers were given the same starting capital. One invested in home ownership, with the other renting a similar housing in the same location while also purchasing an ASX200 index fund.

The performance of their combined housing and investment choices over time were then compared. It revealed that the renters that maintained a leveraged investment in the ASX200 were better off than those who owed a property in the same area.

"Rent is no more ‘dead money' than paying interest on a mortgage. We need a strong new narrative about different ways for people to generate wealth while consuming housing as a product, not an investment," the report concluded.