Property investors certainly aren’t cheering from the property downturn.
But it’s a different story for more than a third of Gen Ys (Aussies aged 34-38), or 1.9 million people, who are keeping their eyes peeled for a bargain off the back of falling house prices, according to survey results from Finder.com.au.
“There’s no reason millennials can’t have their smashed avo and eat it too – especially in this current market,” said Finder personal finance expert Kate Browne.
But opportunities that present themselves won’t mean anything if there’s no planning to back it up.
“Boost your savings and get home loan pre-approval in place so you are ready to snap up a bargain when you see one,” she advised.
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The below chart shows how recent property price drops have seen most baby boomers turned off the market, while Gen Y are more likely to buy.
Aussies looking to buy property, according to their generation
Luckily for millenials, a property market slowdown presents a fresh start for those who had been priced out of the market, Browne explained.
At the same time, a lot of investors are looking to get into the market while prices are dropping and interest rates remain low.
“Property is a long term investment and buying during a downturn could put savvy millennials in a good financial position once the market picks back up, Browne said.
Three things to consider before buying
- Rate hikes in the future: While it’s true that two of the major banks – and many other smaller lenders – have lowered their interest rates, Finder recommends factoring in a 2-3 per cent buffer on top of current home loan interest rates in order to compensate for future rate hikes.
- The local amenities: How close is it to public transport, shops and schools? Are there any signs of urbanisation happening nearby, such as a new shopping centre or park that will add value to the property?
- Extra costs: Don’t get caught up in the overall sale price and forget about the other additional costs which are involved in setting up a new home, such as building inspections, stamp duty and solicitor fees, and removalist costs.
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