The trend of first home buyers investing where they can afford to buy and renting where they prefer to live is becoming a growing sector, which is distorting figures on first home buyers, says one industry authority.
“The great Australian dream of home ownership is not fading away, it's just that the goal posts are changing,” John Kolenda, managing director of 1300HomeLoan said.
“Australia, in contrast to Europe where most people prefer to rent, has traditionally been a bastion of home ownership and Generation Y is still keen to enter the housing market despite a reported drop off in their numbers in recent times. What we are seeing though is more first time buyers become first time investors.”
Kolenda says Generation Y are actually being much smarter with their money and their property ownership goals.
“These Gen Ys enjoy the inner city lifestyle and are happy to rent in those areas or live at home with their parents but they also see the advantages of investing in property in suburbs where they can afford to buy,” he said.
“Younger buyers also are keen to pay down their loans as fast as possible while interest rates are low to boost their equity and possibly upgrade to another property.”
Kolenda also said it should also be noted that the Australian Bureau of Statistics has acknowledged there could be under-reporting of first home buyers in the housing finance market as it relies on data from lenders whose buyers receive a first home buyer grant.
“There are far fewer first time buyers receiving benefits now as government schemes favour new homes over established ones, and the ABS also would not be tracking first home buyers who are investing because they don't get grants.”