- Average homeowner happier than a renter, although renting not the inherent cause of unhappiness
- Renters feeling financial stress more deeply, disadvantaged by short and long term impacts of renting
- Renters urged to stay optimistic and continue saving for deposit, consider alternative options says Sarah Megginson
Buying a home you can call your own is the epitome of the Great Australian Dream, and it seems this sentiment continues to ring true in modern day.
The latest research from Australian comparison platform Finder indicates homeowners are on average happier and less stressed than renters.
Renting not the inherent cause of unhappiness
Finder’s Consumer Sentiment Tracker provides live insights into multiple factors including the wealth, happiness and economic outlook of the general Australian public.
The latest data revealed renters indicate having lower levels of happiness, and higher levels of money stress, than homeowners.
83% of homeowners reported they were happy, in contrast to only 69% of renters. Financial stresses plague a worrying 26% of renters, while only 15% of homeowners reported this to be the case.
Finder Senior Editor of money, Sarah Megginson, expressed her concern for the results.
“We know mortgage stress is a real thing, but our research shows renters are struggling the most.”
Sarah Megginson, Finder Senior Editor
Ms Megginson impressed that renting itself is not the inherent cause of stress or unhappiness.
Rather, she explained that home ownership correlates to a higher income and cash position, relieving financial stresses and leading to higher levels of happiness.
“Renters are more likely to be students, young people starting their careers, or those on lower incomes, which can make it difficult to get into the housing market,” she said.
Renters disadvantaged by short and long term impacts
According to Finder, homeowners are on average saving almost double the amount of renters each month, pocketing $989 as compared to renters’ $516.
Debt payment times are also largely impacted, with renters taking over 9 months to pay off their credit card debt compared to 5 months for homeowners.
While these short-term differences may seem significant, Ms Megginson emphasised that there are also longer-term impacts suffered by renters.
“Being in a tricky financial position can mean struggling to pay for bills today, but it also prevents you from investing in your future,” she said.
Finder data indicates that homeowners have on average $24,732 invested in shares, six times more than that of renters at $3,762.
A look on the bright side for renters
Although data suggests life as a renter is not always sunshine and rainbows, it may not be time to break your lease just yet.
Ms Megginson said saving for a house deposit while renting is absolutely possible, and encourages renters to be smart with their money.
“Your rent is most likely your biggest expense, so moving to a cheaper suburb or finding a few housemates could help you bring down the cost.”
Sarah Megginson, Finder Senior Editor
For those that are keen to get their foot in the door but don’t quite have the cash for their dream home, it’s worth staying flexible and considering other options to reach home ownership.
“If you have enough saved up, you could also look at ‘rentvesting’ – renting a home for yourself while owning a more affordable investment property.
“You could also look at buying in partnership with friends to get your foot on the property ladder – just know sharing finances can be tricky,” concluded Ms Megginson.
