Young Australians choosing property investment over first home
The number of first-time property buyers purchasing an investment property instead of a home is increasing, according to two new sets of data.
Both NAB's Residential Property survey and ING Direct's Financial Wellbeing Index show an increase in the number of young, first-time property buyers purchasing a property investment instead of a home.
The NAB Residential Property survey for the third quarter found first-home investors made up 12.2 per cent of all new property sales in the third quarter of 2016, up from 11.1 per cent in the second quarter, according to the survey.
The survey also found that first home investors represented 10.6 per cent of all established property sales, an increase from 9.7 per cent in the second quarter.
Peter Mastrioanni, of rentvesting.com.au, said the results were a sign that young people still want to invest in property, but in more flexible ways.
"First-time investors are now taking every opportunity to invest in real estate in a way that allows them to invest for reasons such as comfort instead of security, lifestyle instead of retirement, and versatility instead of restriction," he said.
Mastrioanni said Generation Y in particular were choosing to become "rentvesters" instead of giving up on their dream of property ownership.
Rentvesting involves investing in property in more affordable locations, including interstate if necessary, while continuing to rent in the inner-city suburbs.
"This way, they're having their property cake and eating it, too," said Mastrioanni.
The result is backed up by ING Direct's latest Financial Wellbeing Index, which shows a growing numbers of young buyers in the 18 to 34 age bracket are becoming property investors.
The index showed that 22 per cent of Generation Y own at least one investment property, followed by 20 per cent of Generation X and 19 per cent of Baby Boomers.
Mark Woolnough, ING Direct Head of Third Party Distribution, said concerns about housing affordability are not preventing young people from buying an investment property.
“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,” he said.