Generation Y homeowners are bucking with the generational stereotype in order to create and build their property portfolios, according to recent research by mortgage broker Mortgage Choice.
In the independent online survey conducted at the end of March with over 1,000 Australians aged 18 to 28 years, it was found that 85.2 per cent of respondents who are purchasing a property or saving for a deposit within the next two years said they intended to make sacrifices in order to achieve their goal.
This and other results buck the widely held belief that `Gen Y' want the best, want it now and want to achieve it by doing the least work possible.
Mortgage Choice National Corporate Affairs Manager, Warren O'Rourke said some of the results were quite surprising and are certain to influence the housing market in the future.
"The terms `Generation Y' and `making sacrifices' are not usually spoken in the same sentence, but it seems this group of Australians are just as determined as the generations before them to anchor a substantial amount of their financial future into the property market," Mr O'Rourke said.
"The fact that 70.1 per cent of the 1000+ respondents were planning to purchase a property or save for a deposit within the next two years says enough about Gen Y's commitment to the property market. Almost half of that 70.1 per cent - 47.2 per cent - were intending to purchase, with the remainder working on their deposit," he said.
With multiple answers being allowed, the most common sacrifice was to cut back on spending (81 per cent of respondents) while 40.4 per cent planned to miss out on overseas trips. Next on the list were: changing to a higher earning job - 36.5 per cent, remaining in current job - 35.6 per cent, purchasing a less expensive property - 33.8 per cent, and taking on an additional job - 33.5 per cent. Interestingly, 16.8 per cent will go so far as to uproot themselves by moving interstate/towns.
A number of lucky parents will find their Gen Y children living at home again in order to achieve their goal of purchasing property (5.6 per cent of all answers chosen).
In fact, a significant percentage of this generation has already entered the property market, with 13.5 per cent of respondents currently living in their own dwelling (47.5 renting, 35.2 per cent living with parents and 3.8 per cent `other'). Not surprisingly, only 6.3 per cent of these owner-occupiers own the property outright while the remainder is committed to a mortgage.
"In previous decades, that number would have been higher. Housing affordability is a big issue for this generation but it doesn't appear to have much impact in deterring them away from the market. Property ownership - whether for the purpose of making money or making a home - is a goal that the majority of Generation Y is aiming for," he said.
Many Gen Ys are quite entrenched in property investment, with 9 per cent of respondents already owners of investment properties. Sixty-one point five per cent owned one, 23.4 per cent owned two, 7.8 per cent owned three, 4.7 per cent owned four, and 1.6 per cent owned more than five.
Regardless of their current property owner status, respondents intending to purchase property in the next two years were doing so for a number of reasons, the most popular being to live in (71.7 per cent). Eighteen point six per cent were buying it as their only investment, and 9.7 per cent were buying as part of a wider investment portfolio.
Forty-seven point three per cent of these investment purchasers planned to live with parents or other family in order to repay money borrowed to purchase the property.
"Regardless of all the hype about the financial intelligence of younger Australians, it appears many members of Gen Y are quite savvy when it comes to property purchase intelligence, at least," Mr O'Rourke said.
A huge 40.1 per cent of respondents planned to buy property on their own, closely matched by the number intending to buy with either their husband /wife (21.8 per cent) or partner (29.4 per cent). Eight point five per cent plan to purchase with either family (seven per cent) or friends (1.5 per cent).
This indicates the demographics of the future's property owners are changing considerably, especially with more people paying off a mortgage on one income. This has ramifications for the type of properties bought by Gen Y and younger generations as well as the locations they choose.
The most popular states for the survey's property-owners-to-be were Victoria at 22.4 per cent, Queensland at 21.2 per cent and Western Australia at 19.4 per cent. South Australia followed at 18.5 per cent while New South Wales came in towards the end at 17.9 per cent before a large slide to Tasmania at 0.6 per cent.
Surprisingly, given the number of those buying by themselves, houses were the most popular in terms of dwellings that respondents intended to purchase. Units ranked second at 20.7 per cent, townhouses third at 12.1 per cent, house and land packages at 11 per cent. Not so popular were rural, land and commercial.
