Despite the high cost of Australia’s property market, the number of Gen Ys who own investment properties is now on par with the Baby Boomers, a new survey reveals.
According to the Domain Consumer Insights Study, 16% of Generation Ys own two or more properties, compared to 17% of Baby Boomers and Gen Xs.
Although the average age of investment ownership sits at 34 years, the study shows that younger generations are entering the market at an earlier age. The average age that Gen Y Australians became investment property owners is 25 years, whereas the average age for Gen X was 35 years and 45 years for the Baby Boomers.
"With historically low interest rates prevailing, property investment has become an increasingly attractive avenue for building wealth,” Domain Review editor, Jennifer Duke said.
“Australians have always held the ideal of bricks and mortar investing in high regard – a perception that was strengthened by the aftershock of the GFC.”
However, this may not be representative of the home ownership or financial prowess of Gen Y. In fact, it may be due to high house prices that Gen Y are investing in property younger – because they can’t afford to be an owner-occupier first.
The results of NAB
’s latest Quarterly Residential Property Survey suggest that as a result of low interest rates driving up house prices, first home buyers are choosing to invest in property in a more affordable area over purchasing property in a more desired area for owner-occupation.
The share of first home buyers purchasing new property for owner-occupation slipped to 14.7% over the first quarter of 2015, according to the survey, down from 17% in Q4 2014. Over the same time, the number of first home buyers purchasing new property as an investment increased over 2% to 10.1% in Q1 2015.
It was the same story for the purchase of existing property. The number of first home buyers purchasing an existing property for owner-occupation dropped to 15.8% in Q1 2015, from 16.1% in Q4 2014. Meanwhile, first home buyers purchasing an existing property as an investment rose from 9.3% to 10%.