Gen Y heads up investment property pack
Demand for investment property continues to grow in most states across Australia despite tighter investor lending requirements and a slower housing market. ING Direct’s Financial Wellbeing Index found that one in five (20%) of Australians own at least one investment property. Demand has grown by 3% nationwide with younger generations more likely to invest. Amongst Gen Y (18 to 34 year olds), 22% own at least one investment property. This is followed by 20% of Gen X (35 to 49 year olds) and 19% of Baby Boomers (50 to 64 year olds). “What’s interesting is that while there are continued questions around affordability and the challenges for younger generations in getting onto the property ladder, it’s actually Gen Y that is leading the property investment pack,” said Mark Woolnough, head of third party distribution at ING Direct. Overall, results show that Australians still have faith in the long-term benefits of investing in property, he said. “I think property will always play a key role in our investments – whether that’s for our own home or as part of an investment strategy,” Woolnough told Australian Broker. “While housing price growth might slow, property remains a very tangible and solid investment for the longer term and I believe we will always have an active and healthy investment property market.” The higher proportion of Gen Y as investors shows how much Australians love property, keeping the dream of owning our own house or apartment alive and well, he said. However, these younger investors had to be more creative in their approach due to affordability issues prevalent in the national housing market. “What we are seeing are younger generations taking a different approach; they are still getting onto the property ladder, but they’re investing in areas they can afford, not necessarily areas they want to live, and often choosing to rent elsewhere for lifestyle reasons,” he told Australian Broker. The states of the market Looking the results state-by-state, 22% of residents in both NSW and WA own at least one investment property – the highest percentage of any state. WA has the highest number of residents who own two investment properties at 9%. The only state where this investment demand has decreased is SA which fell from 15% to 11% from 2015 to 2016.
Source: Australian Broker 10 Nov 2016. http://www.brokernews.com.au/news/breaking-news/gen-y-heads-up-investment-property-pack-226426.aspx