A new survey of Gen Ys has identified that while majority are happy with property as an investment tool, fewer are considering home ownership.
The Mortgage Choice First Time Property Investors Survey has found 43% of Gen Y respondents will put off buying a home for themselves to purchase an investment property.
There are a number of reasons behind this thinking.
Given the high property values in Australia, property investment is often more affordable than home ownership. The borrowers are able to easier qualify for a home loan for investment purposes than they can for the same loan for owner occupation. There is the extra income you can rely on from rentals collected while the property may also be negatively geared.
The Great Australian dream is changing – for many today this dream is about financial independence rather than necessarily home ownership.
Gen Y buyers are also increasingly driven to save for their first purchase, the survey has revealed. The study found 77% of Gen Y respondents are making lifestyle sacrifices to save money for property, compared to 66% of Gen X and 66% Baby Boomer respondents. Gen Ys were found most likely to cut back on alcohol-related spending, change jobs for higher income, take on an additional job or delay having children in order to save for a deposit. Home Loan lenders are asking for substantial deposits from property buyers – it is difficult to put together a deposit and carry a loan all from your income without the help of tax deductions or property rentals.