Young Australians are still saving for their dream home despite the pandemic, according to a new study.
According to FIS, a leading fintech, 25% of Australians have suffered a career setback in the last six months, with those in the Gen Z and Millennial cohort even more likely to have done badly, with 4 in 10 reporting that they lost pay, lost a promotion or lost their jobs entirely during the first half of 2021.
“While everyone’s circumstances are different, we can see some trends in terms of saving during the pandemic, said Anita LeMaire, product executive, Global Card & Payments at FIS.
“We have found through the PACE survey that Gen Z are thinking about the future, prioritising savings for a new home, building an emergency fund and saving for a holiday.”
“Given the uncertainty wrought by the pandemic, it’s no surprise that Millennials are also focused on budgeting and building emergency funds.”
“This generation is now aged between 25 and 40 and are therefore at a time in their lives where they may be contemplating big life decisions such as getting married, having a child, or buying a house.”
“The shift toward budgeting and saving amongst the younger generations suggests many are wanting to create a financial safety net to prepare for any uncertain times in the future.”
“We have also found that young millennials are the most avid Buy Now Pay Later service users, which allows them to purchase what they need while also saving for the future.”
“As the generations get older, their priorities change again, with Gen X and Boomers looking to save for vacations, save and invest for retirement and set aside money for home improvements and renovations.”
“Through the PACE survey, we have found that while many of the younger generations have experienced job setbacks such as pay cuts, layoffs or deferred promotions, saving has become increasingly important.”
Gen Z and Millennials still believe in home ownership
“Not only are they saving, but many are looking to specifically increase their funds to purchase property. Gen Zs have noted that saving for a house is their top financial goal while young millennials have listed saving for a home in their top 3 personal financial goals.”
“It is interesting to note that while there have been setbacks over the past 18 months, over half of young millennials (52%) have reported that their finances are improving from a year ago, which will allow them to develop an emergency fund, budget and save for a home.”
“Many young millennials are customers of large global banks (32%), with 57% choosing to use an Australian bank. With significant percentages of young millennials indicating an immediate (8%) or definite need within six months (20%) for home mortgages, these banks can help them prepare for home ownership.”
The lockdowns might only be a blip to the homebuying intentions of young people in Australia.
“While the PACE survey did take place prior to the current Australian lockdowns, it was promising to see the younger generations experienced financial improvements following the first wave of lockdowns last year,” said LeMaire.
“Not only did more than half of young millennials (25-29) see an improvement in their finances from a year ago, but young millennials also had the highest employment rate out of the generations, with 90% overall and 76% working full time.”
“With a large part of the country in the midst of a lengthy lockdown, it’s difficult to predict what the recovery will look like this time round. However, with the economy experiencing better than expected GDP growth and the government mapping out a pathway to reopen businesses, we can expect the financial situation of many younger Australians to improve.”
Read more: Parliamentary inquiry into housing affordability opens in Canberra