For a long time, the ideal for many Australians was to own property. However, this is fast changing following rising home prices and stagnant wages.
The cost of living in Australia has risen in recent years as the country faces unprecedented inflation rates. At the same time, job security in the country is at an all-time low. Therefore, for those looking to source mortgages, it has become an uphill battle.
The current average Australian wage is around $89,122 per year. Adjusted a few years, compared to the housing rates, this wage is quite low. For example, when adjusted for 1993, the average Australian wage becomes $175,000 in today’s value.
The other issue that comes when buying property is the increasing prices. Any time you spend saving for a deposit, the more house prices rise and the more value your saving loss due to inflation.
The main reason behind these massive changes in wage decline and job security is attributed to the Covid-19 pandemic. The pandemic impacted every sector in the economy as the world went under lockdown. Having started in 2020, the effects of the pandemic have spread into 2021.
The wage growth in Australia fell by 0.4% by the end of the financial year in June. These are some of the lowest rates ever since the 2008 financial crisis. Still, there is a likelihood of more dips as the economy struggles to return to pre-covid levels.
As property investment goes out of favour among Australians, crypto becomes the best investment alternative.
Aussies readying to purchase crypto
A growing number of Australians are warming up to cryptocurrencies as an alternative investment vehicle. A recent study discovered that more than 4million Australians are preparing to buy cryptocurrency within the next 12 months. Millennials make more than a third of the population.
More than 67% of those surveyed believed that cryptocurrencies are an ideal investment alternative to real estate. At the same time, those who had sold their crypto assets were looking to buy them back. There is also the possibility that most of the workers will start asking to get paid in crypto.
Property Proxy
As the country faces inflation, while crypto increases in value, it is inevitable that crypto becomes an alternative investment. Most crypto enthusiasts even believe it is an ideal medium for saving for an investment property or home deposit. They believe it is better to buy deflationary cryptocurrencies than placing money in banks and see it lose value.
The Australian government’s positive approach to crypto also paves the way for crypto as an alternative asset. For example, the Australian Financial services minister, Jane Hume endorsed cryptocurrencies as a legitimate “asset class”. She also promised not to stand in the way of crypto investors.
While property has been the investment norm for most Australian investors, it is increasingly becoming out of reach. In its palace, cryptocurrencies are taking over.