While many millennial first home-buyers are waiting for house prices to fall far enough to enter the market, the younger generation isn’t as keen, data shows.
Around 47 per cent of Generation Z, or those born after 1996, do think it’s a good time to step into the market, but just 11 per cent say they plan on taking advantage of the downturn to purchase a property, Finder.com.au data reveals.
Why aren’t Gen Z keen on property?
Everything out there is telling us that it’s time to get into the property market, but with the younger generation losing their jobs, it’s not as enticing.
“Older Australians have spent their lives watching property values increase, while Gen Z have been on the outside looking in, hoping to someday save enough to get in the game,” Taylor Blackburn, money specialist at Finder told Yahoo Finance.
“With the lockdown disproportionately affecting younger people in terms of getting and keeping enough work, the idea that it is a ‘good time to buy’ is a harder idea to sell,” he said.
On top of that, younger Aussies are most concerned about being rejected for finance, whether it is a home loan, credit card or personal loan.
It’s also worth noting that this generation will be turning 23 years old this year, meaning buying a property might not be high on their to-do list.
But while they’re worried about the property market, they’re showing an interest in stepping into the share market.
In fact, in Finder’s May survey of 1,025 Australians, about 21 per cent of those 25 and under said they planned to take advantage of the downturn by investing in shares - that’s more than double the amount interested in the property market.
“Gen Z is opportunistic, but the barriers to entry for shares are much lower than property investing,” Blackburn said.
I’m Gen Z and I want to buy a home. What should I do?
If you have a deposit saved and you’re thinking about the property market, there’s no reason why you shouldn’t jump in, property expert Michael Yardney told Yahoo Finance.
However, you might want to start slow: “Do not try and run before you walk,” he said.
“Many people want to start in this sort of home that took their parents 30 to 40 years to be able to afford.
“Instead, why not consider buying an apartment, but not in one of those high-rise Legoland blocks in the CBD – they have no scarcity, no owner occupier appeal and very little capital growth. Consider an established apartment in a small block in a great neighbourhood close to public transport and amenities.”
And if you’re not ready to move out of home yet, you can try rentvesting.
“While the thought of living in your own home is a tempting one, there is a financial incentive to making your first house an investment property,” Yardney said.
“This allows you to live where you want to live but can’t afford to buy as a tenant, while still providing the opportunity to enter the property market investment property we can afford to.”
Before you make the leap however, Yardney advises all Gen Z-ers to consider the surrounding costs of a property - not just the property price - like stamp duty, conveyancing and moving costs.
Not to mention insurances, council rates, body corporate or owner’s corporation fees if your new home is an attached dwelling, as well as repair and maintenance, Yardney said.
But most importantly: “Get advice,” Yardney said.
“Some agents prey on first home buyers by drawing them in with sharp marketing and then negotiating with an eager, naïve customer who is anxious to get on the property ladder,” Yardney said.
“Do not fall prey.”
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