Don’t be so quick to buy property

By Catherine Cashmore
Tuesday, 31 January 2012

Like many other industry professionals, I’m often accused of “talking up” the market for my own greedy ends – however, the majority of my working life is spent encouraging purchasers to avoid various real estate transactions, rather than enter into them. Having worked in this industry for many years, I’m still amazed at the risks people take when purchasing a property. It’s no surprise sales agents get a bad name with consumers – buyers seem completely oblivious to the fact that they’re working for the vendor not purchaser, and as such can offer little help or advice outside essential information that can only benefit their clients – namely the vendors.

For these reasons – and many more – buyers’ agents have become commonplace over recent years and the industry has grown considerably. In America buyer advocacy is considered the norm for property shoppers. However unlike in Australia, the listing authority between the selling agent and vendor specifies that the fee will be payment for “bringing a buyer”. Therefore, when the property is sold and commission paid, the fee the buyers’ agent receives usually comes directly from the vendor-paid commission and the buyer simply pays the purchase price.

With more mouths to feed, this is why American real estate sales commissions are so high to begin with (I’m told around 6%). It’s a complicated process fraught with conflicts of interest. Obviously if the buyers’ agent is being paid from the vendor’s commission, his or her fee will be greater based on property price. In other words, the more you pay for the property, the more the buyers’ agent receives, so there is little encouragement to negotiate a low price – although I’m sure there are ethical agents in the US who do a good job regardless.

In Australia our system is a lot less complex. Buyers’ agents work exclusively for the buyer, have an authority with the buyer, are paid by the buyer, and as such are contractually obligated to work in the buyer’s best interests. Therefore when it comes to sourcing a home, avoiding risks and seeking independent advice outside that of the selling agency, working with a “good” buyers’ agent is a wise idea. However those doing so should always choose a “fee for service” model, rather than a commission-based process.

Getting reliable advice is especially relevant to those buyers who intend to invest in property in another state or territory. When I worked as a selling agent, I often sold property to buyers over the net – sight unseen. It wasn’t unusual to get emails and phone calls from purchasers who were prepared to sign a contract on the advice I relayed alone – advice benefitting the vendor. The Australian market is fragmented and as such, different states are at differing stages of the property cycle. While Perth was tracking sideways a couple of years ago, Melbourne was enjoying a 20% rise over a single quarter. Therefore investors don’t want to be tied to local purchases if it’s wiser to search further afield and if this is the case, obviously a fair amount of research has to be done remotely. But should you travel to view a property before the final decision is made?

Well, that’s the advice from some who suggest investment should be totally void of emotion. It’s not so bad if you employ a local professional to do the necessary due diligence on your behalf – but in my opinion, internet shopping into the world of real estate with no more than a few advertisements and Google maps to sway your judgement is no better than plunging your hand into a lucky dip and hope it comes out holding gold. Checking out the feel, suburb and general surrounds of a location is something you can only experience physically – and yet it wouldn’t surprise me to see “Buy Now” buttons sitting next to real estate advertisements at some point in the not-so-distant future.

For instance, who can say how many buyers this year have been tempted by the numerous spruikers of American property investments and purchased into the country’s falling market, which seemingly has no bottom to its pit of despair? However, at the Home Buyer’s Show I attended in Melbourne last year, the room was full of “property professionals” advising the wisdom of such investments.

In Australia a buyer can travel nationwide and purchase a property on a weekend away if he or she so desires. If she’s really brave, she can do it remotely – signing and returning the paperwork via fax or email. However, any transaction is subject to the laws and regulations of the state purchased – and like every other state law in Australia, they differ(in some cases quite considerably) from state to state. For example, in Victoria, buyers commonly have three business days to “cool off” on real estate sales transactions (auctions excluded). New South Wales on the other hand allows five business days. Perth has no cooling-off period, and Darwin has a four-business-day cooling-off period. In all cases there are exceptions to the rule and if you don’t know what they are, you could find yourself coming unstuck.

For example, in Victoria, buyers commonly think the cooling-off period starts when the vendor signs the contract – however not so!  It starts from when the written offer is made – regardless of it being accepted. If the vendor waits for three days before signing the contract and the buyer has not employed a solicitor to conduct the due diligence needed for the paperwork, the time to use the “get out of jail” card without losing your deposit has long passed. No doubt other states and territories have variations on this and it’s confusing enough when you work in the industry – let alone when you’re conducting a real estate transaction only two or three times in a lifetime.

There’s currently a proposal on the table to bring in national licensing for all real estate professionals. When/if implemented it would allow realtors from different states and territories to conduct their business anywhere in Australia. However, without some streamlining of the different systems in place, it’s hard to imagine how agents will have the necessary knowledge to work in the best interests of their clients without local expertise. I am hopeful the delays keeping the proposal at bay are being used to address these issues.

Other points of confusion concern the different negotiation practices employed in each state or territory. For example – the market in the inner suburbs of Melbourne can move at the speed of light. As such, placing a contract with any special conditions is a challenge in itself, and the process has to be navigated carefully if the offer is likely to be accepted. However in Perth, where – until recently – prices have languished and auctions are rare, it’s common practice to place several special conditions on sales contracts and without understanding the process, it’s not wise to venture into an unconditional agreement.

Purchasing real estate is fraught with danger. Even for those with experience, without the best research and advice, there are enough hidden dangers lurking to ruin the potential of any pricey acquisition.  For example, if you wandered into Western Australia, buoyed up on the recent market activity and population projections without due awareness of the state’s new planning schemes, you’d risk missing out on some excellent potential for short term capital growth. In Perth, large swathes of land are being re-zoned to allow for greater density in major activity centres. This could mean a house sitting on a block of land with the potential for a two-storey, seven-metre-high development could become next month’s six-storey unit site. Obviously it will affect the potential and value of various blocks of land depending on which way the wheel turns.  All in all, the internet’s not going to be very good at sourcing out these types of intricacies.

Despite all of the above, when property shoppers take to the streets once again, there’ll still be a swathe of investors who’ll delight sales agents as they stumble across the street theatre of an auction and decide on first look to raise their hand and place a bid.  Some may get lucky, but others will be the fodder for this year’s newspaper headlines and in essence, it’s no different to a game of Russian roulette. Property investment isn’t easy; it’s hard work and takes time. Analysing the price requires on-the-ground legwork and access to data bases that in some states are only accessible to licensed real estate agents. Working out if a property is a suitable investment requires a physical inspection from someone who is an experienced local and should not be done via internet alone. It’s true no investment is free of risk, however make sure those you take are calculated and not reckless.

Population surges not always a good indication of a solid investment

By Catherine Cashmore
Tuesday, 24 January 2012

When considering real estate investment one of the rules you’ll often hear quoted is “follow the population”.  An increasing population indicates work opportunities, investment in infrastructure and demand for housing – however, it doesn’t always result in the best long-term capital growth if this is the objective.

It’s always important to analyse the reasons behind any surge in population and conduct a risk assessment on the longevity of the move before committing to a purchase.  For example, mining towns attract rapid population growth and infrastructure development; however, because that growth is reliant on one industry, the risk of a quick reversal of the wheel is ever prevalent – even in mining the good times don’t last forever – hence investment in a mining town is all about “timing the market”, rather than “time in the market”.

For an example of a longer trend in population growth that can also be risky for investors, you need look no further than the city.  Back in the 1800s just 3% of the world’s population lived in urban areas. By 1900, the number of people choosing to reside in a city swelled to almost 14%. By 1950, 30% of the world’s population were choosing city living above rural lifestyle and in 2008 – for the first time in recorded history – half the world’s population were living in towns and cities. Earlier this year, China recorded a 50/50 split between city dwellers and “ruralites”, and by 203 (assuming we’re not hit by a monumental plague) the number of people opting for a city lifestyle will swell to almost 5 billion – that’s 70% of the population.  Frightening statistics – especially when you take into account the challenges we already face feeding the earth’s 7 billion.

The top 25 “mega-cities” now account for over half the world’s wealth – 50% of which comes directly from within India and China – which are incidentally Australia’s largest migrant populations (now on the brink of outnumbering the European-born residents.) Here in Australia we have a population growth rate of 68%, well above the global average, which according to the “population reference bureau” is projected to grow around 38% by 2050.  We come second only to Saudi Arabia, which projects a growth rate of 74% by 2050.

Roughly 89% of our population live in urban areas, 64% of which reside in the capital cities – by 2050 this will increase considerably.  We’re seeing changes on a monumental scale and the effects on our housing, infrastructure and topography will be unprecedented. The borders of our cities will have to expand to eventually soak up the smaller satellite towns surrounding the capitals – for example, it’s feasible that Melbourne’s metropolitan area will one day include Geelong and Ballarat – and density in the inner suburbs will feature strongly.  Obviously it indicates investment in rural locations for purposes other than lifestyle is unwise as demand is likely to remain weak.  However, investing in a climate of rapid expansion requires a little more due diligence than simply “following the population” if the aim is to build the kind of wealth that results from long-term trends.

The approval of “mooted” residential developments is the first risk that must be evaluated to protect against periods of oversupply of any one type of accommodation.  For example, the massive projection of high-rise apartments in Brisbane and Melbourne has played a significant part in slowing – and in some cases reversing – the profit investors expected to achieve over the last three years principally because of the record numbers under construction.

The same scenario happened in Melbourne’s Docklands when it was established.  The apartments were flogged by sales agents taking their cut directly from the developers pushing prices up in a wave, however supply was never tight enough, or the developments attractive enough, to ensure ongoing demand.

There may be broad acceptance that apartment living will be the choice for a growing number of inner-city residents – and numbers moving into inner-suburban localities bear witness to this – however there’s currently no indication that high-density, high-rise apartments will ever attract the level of capital gain you can expect to achieve when a market is driven principally by owner-occupier demand.  Residents living in these apartments are mostly renters – not owners – therefore the demand is principally driven by one market – namely the investor market.

We’re often told Australia has a critical shortage of accommodation around our major employment centres – however this doesn’t mean you can purchase any accommodation and reap the rewards.  Our shortage of accommodation should not be confused with the general buyer market, which is principally a “shuffling of the cards” and not an indication of how many need a roof overhead – or an assertion that they’ll be prepared to purchase anything.

A better indication of Australia’s critical housing shortage comes from our vacancy rates, which remain well below the long-term average.  Investing next door to these job centres may attract renters – but it’s unlikely to attract the kind of growth you can expect to achieve in an owner-occupier-dominated market. Move in the wrong direction and it’s easy to walk into an investor-fuelled speculative bubble.

Jobs are transitory and many don’t want to – or can’t afford to – purchase close to their workplaces, therefore they choose to rent and make their “expensive” purchases in areas less industrialised and more appropriate for family accommodation.

Mining towns are good examples of this.  The buyers they attract are investors who want to gain positive yields from the number of workers requiring accommodation.  The capital gains are fuelled by increasing numbers of investors jumping onto the band wagon.  However the workers do not want to settle long term and therefore choose to rent, not buy – when the work dries up, the majority won’t be hanging around and losses occur as fast as the gains. Stories of investors falling foul of the market are common because they’re projected to the front pages of the media, however when the reasons are analysed it’s always possible to see where mistakes were made. There are no guarantees with any type of investment – but there are safe guards you can set in place to insure against the risk of loss.

Other risks resulting from simply “following the population” occurred during 2009, when masses of purchasers moved into the outer-suburban new estates buoyed on by the post GFC first-home buyer incentives. For example, in the year 2009-10 the areas attracting the fastest population growth were all located on Melbourne’s outer borders – Wyndham, Melton, Whittlesea, and Carndina.  The level of growth was unprecedented and capital gains were fast. Developers of new land estates inflated prices under the surge of demand, with some suburbs rising over 20% during the year. Yet the gain was short term – as soon as the incentives were pulled back most purchasers experienced a short-term loss. The pain was well publicised in the press during subsequent months.  Defaults went up, and the demand could not be sustained from the area attributes alone.

There are no fast and hard rules when it comes to property investment; most advice will have exceptions based on the idiosyncratic characteristics of the suburb.  However as a general rule try and seek out those areas where turnover is low with a good proportion of owner-occupiers to renters and a diverse range of accommodation.  Happy owners generally hold onto their properties during a market downturn and therefore short-term losses from an abundance of supply are minimised.  These areas are generally populated by generations in their middle years.  Families and mature couples in secure long-term employment benefiting from growing equity.  Risk minimisation is important, therefore sticking close to the suburb median is important to insure against market fluctuations – spending more doesn’t necessarily mean you’ll gain more.  Finally, always invest within your means: having good buffers to protect against job loss and absence of cash flow is primary.

Empty homes should house those who need accommodation:

By Catherine Cashmore
Monday, 09 January 2012

It’s almost impossible to accurately estimate the number of homeless in Australia. According to the 2006 census there were 105,000 – that’s 5,100 more than recorded in the in the 2001 census, which counted 99,900 without a permanent abode.  Of course there are many reasons individuals find themselves without shelter.  Some come from abusive families, many being women and children, and some are what are commonly known as “couch surfers” – sleeping a night here and there.

However, as the price of housing increases, not to mention the shortage of affordable rental accommodation, we can expect an increasing number to join the queue. It’s inevitable, because although housing affordability has improved slightly throughout 2011 with marginal falls across our capital cities, subsequent interest rate cuts, with more predicted later this year, will slowly swing the balance of power back into the hands of the vendor as part of the typical cyclical nature of the “property clock”.

The primary reason we have such a shortage of affordable housing is down to limited supply in the places people want and more importantly, need to live – the city.  More than 65% of Australia’s population lives in and around our major capitals. Australia is a mere teenager compared with Europe, which has evolved with a network of smaller towns and cities to soak up a comparatively even spread of businesses and thus job opportunities. Due to a consistent underestimate of our growing population from those who plan for growth, we haven’t prepared effectively for the population surge.

For example, unlike in other countries, most of the job centres are centralised in and around the capitals. On the outskirts of the city where land is in abundance, the cost of housing is pushed up by limited land releases and hefty development overlays, which are designed to compensate for the current lack of facilities such as schools, shops, parks, and transport – which are needed to create a much-needed sense of community for those moving into the new estates. As a consequence housing in the areas stretching beyond the train lines fails to attract the demand needed to produce an adequate turnover of stock or attract the surplus of buyers.

Consequently inner-city areas are growing in density with a dramatic increase in high-rise accommodation often going against complaints from councils and residents who protest in vain as their once leafy suburban localities start to evolve into something akin to Manhattan – they no longer have a choice.

Those that commute daily into the CBDs have to leave extra time to battle traffic, or accept standing room only on the local train/tram network.  Many home buyers have accepted the traditional Aussie house with a backyard for games of cricket and a family barbecue has been replaced with either a flat or small subdivision and courtyard at most. For those who want a larger property the compromise is usually a move into an outer-suburban estate and accept being far from friends, family, and work – plus slower capital growth. Most first-home buyers stuck on the rental ladder are only able to afford to enter the housing market if they have either help from family/friends to raise a deposit, or meet someone with whom to combine wages and savings.

Rents have increased more than 4% this year in some areas, and it’s unlikely that this will ease as the trend towards saving rather than spending continues to place a strain on affordability. And furthermore, it’s been predicted that by 2020 we’ll have a shortfall of 105,000 much-needed social housing homes – homes to house the neediest in our society.

Therefore it may surprise some to hear of the massive numbers of vacant residential stock we have in Australia. In the 2006 census about 10% of the current housing stock was recorded as vacant. Due to difficulties in collecting the data, such as assessing which properties are “reserved” as holiday homes, temporary rental accommodation or are simply in the process of renovation, it’s hard to correctly assess the numbers – however it’s fair to assess a significant minority have been abandoned altogether and are therefore magnets for vandalism and short term squatters – most residents can point to at least one vacant property in their streets.

Considering the stresses caused by a shortage of available accommodation outlined above, I doubt anyone would argue that wherever possible, vacant accommodation should always be used to house those who need it most.

Neither is the problem limited to Australia. In the UK there are 930,000 empty homes, 350,000 of which have been vacant for six months or more.  Therefore, there’s been a massive innovation to bring derelict homes that have been inherited, or acquired – but due to financial constraints sit vacant and unused – back to liveable condition.  In some cases where families are unable or unwilling to renovate, grants have been offered by various government schemes to assist the process, and in some circumstances, properties have been re-acquired for the purpose of social housing.

More concerning however is a growing trend – particularly among Chinese investors – to acquire housing as a safe place to bank funds with no intention of ever marketing for tenancy. It’s a practice common in Chinawhere the population have been used to a lengthy housing boom, and until recently, no taxes on property.  For these investors, there’s little benefit in struggling to find a good tenant, it’s more important to keep the property in tip-top condition for when they decide to sell. Neither do they limit their acquisitions to China, the trend is also popular in the US and Australia, where flats and luxury houses sit vacant for extended periods of time. Australian houses are “affordable” in comparison to those in the major Chinese capitals.  In China property rights don’t allow ownership of the actual land, and therefore owning a genuine piece of Aussie dirt where their money can be safely stored away from government hands is an attractive investment model.

It’s true we have strict rules regarding foreign ownership of established residential property – however it’s also sadly true that loopholes in the system are easy to navigate and the number of foreign investors entering the market is a mystery to all who attempt to find out – an issue aptly highlighted in Chris Vedelago’s recent article. Furthermore, there are few restrictions on purchasing new homes and many are just happy to soak up the abundance of freshly built high-rise accommodation that is commonly sold with promises of rental guarantees and above-market rates regardless of whether the unit sits vacant during or even after the guarantee has expired.

We should encourage investment in residential property, providing the consequence is an increase in available rental supply that can keep vacancy levels more in balance with affordability.  However, too many investors are using our precious limited housing supply merely as a bank account with no intention of navigating the difficulties associated with finding an appropriate long-term occupant.  There should be restrictions on this practice and also more energy focused on initiatives to make use of disused or neglected homes.

Identifying where the derelict homes are would be the first step – thereafter perhaps government initiatives could be proposed to set a plan in place to encourage practical moves toward getting the home occupied. After all, it’s far more cost-effective (and environmentally friendly) than building from scratch. I would go so far as to suggest there should be a named person on every council working on the issues. Property can be an excellent investment, however its primary purpose should never be neglected and therefore there should be a requirement on every home owner, wherever possible, to ensure the houses do not remain vacant without valid reason, for extended periods of time.

Yes, we have a homeless issue in Australia; however, we have arguably enough empty properties to provide housing for all. Let’s start making use of the thousands of homes that are left empty and abandoned and make 2012 a year of new positive initiatives for housing.

Put an end to first-home buyer handouts

By Catherine Cashmore
Tuesday, 17 January 2012

There’s no doubt purchasing a property is the single biggest investment most people make. Even when housing was a cheaper acquisition back in the 1950s – long before it was recognised as a common investment model and subject to turbulent property cycles, purchasing a house and servicing a mortgage was a major financial stress factor in most property owners’ lives.  It was a simpler equation then.  Most waited until they were married to make the commitment, and then tended to purchase the property they intended to stay in for the next 20 to 30 years and bring up a family.  There was little need to move or commute long distances to work, as many occupied the same job position for life.  The motivation to pay off the mortgage was a security for retirement, and equity models were largely unheard of.

We’ve come leaps and bounds since then.  Debt is no longer a dirty word but a means to “wealth creation”. House prices have been inflated by a long-established ease of lending practices, various inflationary policies such as the first-home owner’s grant, and tax incentives to encourage investors onto the property ladder. Our inability to effectively plan for future population growth has ensured prices in those areas attracting the highest demand have sustained tight vacancy rates, rising rents and unsustainable booms followed by sharp corrections in the property cycle.  And it’s hard to ignore housing affordability has split the market between those who can and those who can’t (broadly speaking, the asset-rich with access to existing equity – and the asset-poor).

The motivation to ease the pain for first-home buyers and increase affordability in particular has led to a raft of policies that have done precisely the opposite. The first-home buyer grants have been renamed by various professionals as the first-home “vendor” grant, with widespread acknowledgement that they increase competition and as a consequence, increase property prices.  The incitement to borrow against equity and increase debt with interest-only loans, decreasing loan-to-valuation ratios, and various lending models such as “rent to buy” schemes have encouraged some borrowers to invest short term – “speculating” on a continuation of the housing boom. This is dangerous territory.

In Victoria, first-home buyers are underway to get a 50% stamp duty cut by 2014, while NSW is busy reining in stamp duty cuts on established properties for first-home buyers, which will no doubt skew market prices – at least in the short term. And to confuse the equation a little further, first-home buyers could now be termed “first-investment buyers” because the choice to live at home longer and purchase the first property as an investment rather than principal place of residence is now encouraged as a method to establish a foothold.

Neither does it help to see numerous “get-rich-quick” schemes wafted around like confetti. As I write, an email with the headline “How Linda Built a $12k per Month Positive Income (from property) in Just 6 Years” has landed in my inbox, and I don’t need to emphasise it sounds too good to be true.  Everyone’s looking for short cuts into what should always and principally be regarded as a long-term investment with the primary purpose of providing shelter – and not just to creating wealth.

In short, the only effective way to ease house prices is to increase supply in “liveable” areas of the city (areas with enough amenities to provide jobs, transport and options for those able to make the move into newer estates).  However, seeing as this isn’t happening at any great pace, and it’s unlikely that the already established incentives such as depreciation models and incentives will be abolished and further constrain inflation, we have to move our focus to a more traditional path.

Among all attempts by government to encourage home ownership, the only real policy that seemed to have the potential of genuinely addressing affordability was the introduction of the first-home savers’ account. It was launched back in 2010 as a high-interest, low-tax saving account, set up specifically to assist first-home buyers enter the market.  It committed (and educated) purchasers to save over a four-year period, however on the proviso funds were “locked” for the entirety of that period and only accessible for use towards home ownership at the end of the term.  Furthermore, requirements were for at least $1,000 savings to be deposited per year. Therefore those taking up the scheme had to have a long-term plan, secure employment, and plenty of dedication and vision to stick to the contract – something our 21^st-century lifestyle rebels against.

As touched upon above, changes in employment are expected, particularly among the first-home buyer generation, and understandably there was reluctance to lock away funds with no “get out” plan for an extended period of time.  Therefore, take-up was initially poor. From a predicted 750,000 accounts, just 15,300 were created, with only $40 million spent out of the $1.2 million originally allocated. Thankfully there’s been some relaxation on the previous conditions, and funds can now be accessed before four years if a purchase occurs beforehand.  However, the changes have come too late and as far as I’m aware, the savers’ accounts are now only offered by a limited number of smaller lending institutions. For those interested, more information can be accessed here.

Thankfully there’s been a gradual trend towards the psychology of saving and paying down debt since the GFC.  This isn’t isolated to Australia; the reaction has been the same worldwide – it’s natural in such times.  It’s also significant that the changes have been prevalent in gen Y’s age group.  Westpac New Year’s Financial Resolution Survey questioned 2,000 Australian’s on their prospective spending habits for 2012. The results showed that three out of four gen Ys were committed to a focus on saving in the new year, and this can only be welcomed.

However, how long the changes will last is debatable, especially considering further talks of rate cuts by the RBA, which are solely designed to get us out there spending once again and will in turn stimulate inflation in the housing market.  There’s no argument from consumers that the rate cut was needed, however as has been pointed out many times, what’s needed in one sector isn’t necessarily needed in all.

Underlying demand and a shortage of homes in the capital cities will keep growth in house prices on an upward curve; the concern is around how many we are locking out the market with “kind” inflationary incentives that do nothing to educate our future workforce of the real tricks to building wealth and sustaining growth over the long term – principally saving, limited spending and wise long-term investment of the surplus.  One of the problems that led us full throttle into the GFC in the first place was short-focused, irresponsible unrestricted lending practices (principally in the US), which promised purchasers they could jump into home ownership without the strict self-governance of basic lessons such as the ability to comfortably service debt.  We thankfully didn’t have the same phenomenon here, however if we keep feeding the psychology that when the going gets tough someone will produce the taxpayer cheque book, we’re in the process of building bubbles and unstable foundations.

The lesson isn’t just one that needs to come from above.  It starts at home – according to various surveys, including one recently conducted by Rabo Direct, one in five gen Xs agree with more than 35% of gen Ys who accept that the only way they will be able to purchase a property is through handouts from their family (who purchased the traditional way, with no help and stricter lending conditions and generally higher interest rates).

Is it really that much harder now than it was then?  Well, yes, it is if initial expectation is too high.  We often see headlines exclaiming that the Australian dream is no longer a suburban detached house with ample backyard for games of cricket, but instead has been replaced with apartment living.  It’s not a replacement of the dream, it’s acceptance from those who are unprepared to move into the outer, more affordable, suburban areas, that they need to compromise and build towards the dream or accept a long commute to work.

So let’s drop the incentives, the handouts, and get back down to basic education. Housing is expensive and no one – government included – is going to step in and relieve the pain.  Therefore teach your children to start saving young and build stepping stones towards their long-term dreams – one of which should always be home ownership (most don’t want a life time renting and yet that’s what we’re slowly heading towards).

Take advantage of educational incentives such as the first-home savers’ account, but don’t give the lesson with a handout.  Warren Buffet is over quoted, however when you read his pearls of wisdom you can understand why – “A very rich person should leave his kids enough to do anything but not enough to do nothing.” The valuable long-lasting lessons are the ones we work hard for.