“The loss of other alternatives when one alternative is chosen”
The Australian housing market is a raging current and has shown evident examples of this over the last century. If you’re not in the market and have directed your funds to other avenues, market growth is your opportunity cost.
However, it’s not a simple fix. Saving up for a deposit can be a long and gruelling process, which has been further exacerbated by the fact that the market has recently experienced its biggest price jump ever recorded. Combined with soaring cost of living (inflation), it’s fair to say that many feel deflated.
Based on current median house prices, it takes the average Australian eight years to save for a 20% deposit and in Sydney and seven years in Melbourne – not taking into consideration the inevitable increase these locations ensure over the same timeframe as shown below:
As you can imagine, if it takes eight years to save for a deposit with median house prices increasing at 25% per annum – it’s fair to say you’re fighting a losing battle. At present, the national mortgage size is increasing at 6.4% per year, whereas the average fixed salary increase recorded for the second quarter of 2021 was a mere 1.5%.
Good news for you though, you’re on the right track!
Under the Investor Express program, we are making conscious efforts to save above average, investing savings into a high interest returns account to beat inflation and targeting investment property purchases within the next few years.
This program is the KEY to setting yourselves up financially, and later being able to predict future trends when it comes to timing the purchase of your future investments.
Below details some examples of client success stories and the opportunity cost they would have endured should they not taken the opportunity to invest when they could:
DARREN AND PRISCILLA
- Darren and Priscilla are a Melbourne couple who couldn’t find a property in their price range that they wanted to live in
- They started considering property investment but they didn’t know where to invest or what to invest in: “Not knowing where to invest and what type of property – that was a really scary prospect for me.”
- They developed a 15 year plan with AllianceCorp to secure their retirement without impacting their lifestyle
- “Nothing has changed for us, really. Which is a great thing… Work life balance is basically the same. AND we’re growing a portfolio, which is amazing.”
- Darren & Priscilla purchased in 2019 in Ballarat VIC for $455,000 & received a valuation of $537,000 in 2021. The opportunity cost in this example works out to be $41,000 pa.
- Caitlin is a 26 year old professional and elite athlete. As she pursues her football career, she has to move around, which made rentesting an effective strategy for her.
- She has fast tracked to retirement and through the information she received at her strategy session, she’s been able to maximise the financial return on her pre-existing regional property.
- “Some of the reasons I decided to invest in property are that it will create freedom for myself, it will create generational wealth – they’re assets that I can pass down to my future family. And also it allows me to have more opportunity, time freedom and retire comfortably and early.”
- Caitlin purchased in Kallangur QLD for $370,000 in 2020 & received a valuation of $400,000 in 2021. Again, can you afford to miss out on the opportunity cost of $30,000 pa.
The above case studies simply echo the point that your savings alone can’t outperform the Australian housing market. The Investor Express program provides the perfect avenue for you to fast track your success in the property market, and make waves to facilitate financial freedom.
If you’re interested to find out more, request a FREE, no-obligation strategy session with one of our Cash Flow Specialists below!