Another example is the idea of people being informed that relying solely on their home for pension is now not a very good idea.
Although many countries will not experience a mortgage meltdown like the one that occurred in the United States, they are feeling the effects of the global credit crunch and an overall slow down in the real estate and property investment market. Countries as far apart as New Zealand and Great Britain are all feeling the pressure pushing down prices and values of homes in their respective markets.
In New Zealand, first time home buyers are being advised to either hold off on buying a home, or if they have already made a purchase, to wait things out until prices get better. A relatively new angle on the real estate industry decline was released when the insurer Standard Life announced that many people who think that the value in their home or property will be able to fund their retirement should be told that this is a poor plan.
The general idea is that current property or home owners can sell their home and move to a smaller house with fewer expenses. The difference between the two prices is what finances the retirement. Unfortunately, many of these retirement or second homes are also relatively high while the main home continues to be relatively low, leaving little for retirement living expenses.
According to Halifax figures, after selling an average detached house, and buying a retirement bungalow, the retirees would have an income of only 100 pounds a week, hardly suitable to cover retirement and living expenses.
"Many people are pinning their hopes on a continuing strong housing market to provide a retirement of their dreams. But relying on your main residence to provide a retirement income is a potential disaster," says Andrew Tully of Standard Life. Although the firm understands that real estate is influenced by local markets, however, the findings continue to be troubling. Standard Life is also not the only firm warning property investors of the danger.
At Heron House Financial Management, Wayne Evans said, "Many people have got it into their heads that property is a one-way bet that is only ever going to make them money. If investors pile all their money into property, they won’t have a diversified mix of investments."
