The ‘live now, pay later’ mentality often associated with Generation Y is more like ‘buy property now, live well later’, according to the results of a recent national survey.
The findings of the Mortgage Choice 2013 First Time Property Investors Survey show that younger generation Australians are shaping up to be savvy investors who are aware of the benefits of buying into the property market and are often willing to give up aspects of their lifestyle to fund their purchase.
Of the 1,000 plus Australians surveyed who were planning to buy their first investment property in the next two years, Gen Y made up more than one third (34 per cent) of the respondents.
Interestingly, for two fifths of these Gen Y respondents, an investment property will be their first-ever property purchase.
Commenting on the survey findings, Belinda Williamson, Head of Corporate Affairs for Mortgage Choice said that Gen Ys appear to be financially switched-on and are focusing on property investment.
The survey found that 40 per cent of the respondents in this age bracket were willing to forgo any available First Home Owner Grant on their first property purchase in favour of buying an investment property as opposed to a home.
“The other 60 per cent of the Gen Y respondents already own their first or subsequent home and are now branching out to make an investment property purchase”, Ms Williamson added.
With financial security high on their agenda, Gen Ys were motivated to purchase their first investment property by the need to set themselves up financially for the future (75 per cent), followed by the perception that there is more benefit in investments such as property than in the share market (47 per cent). Rounding out the top three was the notion of planning for their retirement (43 per cent).
“This younger generation of investors is looking for financial freedom and they see more profit in bricks and mortar investments,” Ms Williamson noted.
The greatest challenge facing Gen Y first time investors was saving a deposit (42 per cent), followed by finding the right property (29 per cent) and choosing their investment strategy (15 per cent).
The survey shows that 75 per cent of Gen Y first time investors were choosing to make lifestyle sacrifices to help them achieve their property goals.
The top sacrifices included cutting back on general day to day spending, eating out less and limiting take-away food, missing out on a holiday, delaying a vehicle purchase and last but not least, cutting back on alcohol related expenses.
Ms Williamson concluded by saying it is encouraging to see Gen Y bucking the stereotype of being reckless with their money, proving to the generations ahead of them that they are more astute when it comes to investment decisions than given credit for.
“It shows that age doesn’t matter when it comes to building an investment property portfolio.
“A sound investment strategy should set anyone up for success, regardless of their life stage”, she concluded.