With median house prices hitting north of $600,000 in many of Australia’s biggest cities, many millennial homebuyers are struggling to enter the property market.
“The big news is that Gen Y has grown up and is now jumping into investing, not only with both feet, but with gusto and great success,” said Simon Pressley, head of property market research at Propertyology. “They’re open to different, more flexible approaches, and you’ve got to respect that. They’re educated, confident, determined and brave.”
Despite a decade’s worth of predictions that they’d “never be able to afford it,” the generation currently aged 23 to 35 is finally investing in bricks-and-mortar.
According to Pressley, the most successful young investors are more determined to achieve financial independence than their parents were. “And it’s paying off for them, partly because this generation is more receptive to investing in parts of regional Australia where property is more affordable and the potential for growth is better than what most realise,” he said.
“We’re finding that millennials are less set in their ways and braver than previous generations. They’re more willing to take on a degree of risk, and they generally have a more flexible approach to life”.
“They’ve grown up in an era of ever-changing technology,” Pressley said. “They don’t stay in the same job like their parents did, and they invest differently, too. Millennials are keen to think outside the box.”
Rentvesting is just one way these savvy young people are having their cake and eating it too. “In a lot of cases, Gen Y aren’t ready to anchor themselves to a particular home. They want to do some adventuring and they’re open to moving for better employment opportunities. But renting doesn’t mean they’re not savvy property owners”.
Considering the exorbitant median house prices in major cities, young investors are instead focusing on high-growth areas outside of high-profile cities, while still living in properties that suit their flexible lifestyles.
“They live in a property that suits their lifestyle and invest in affordable locations with good potential – often that means a completely different city,” Pressley said.
Some Gen Y investors use the equity they make from rentvesting to fund the deposit for their first home at a later date. Others are happy to continue renting indefinitely while simultaneously building an impressive property portfolio.
“We really need to start giving credit where credit’s due. Millennials are quite savvy and many of them started investing a lot earlier than baby boomers and Gen X did,” Pressley said. “They want to enjoy all of the creature comforts of life in their 50s through to their 80s, and they understand it would be foolish to rely on age pensions and employer-funded superannuation [alone].”