August 16, 2013
Survey reveals younger generation more financially astute than given credit for
The ‘live now, pay layer’ mentality often associated with Generation Y is being defied, 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+ Australians surveyed who are looking to buy their first investment property in the next two years, Gen Y made up more than one third (34%) 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, local Mortgage Choice mortgage broker, Melissa Jackson said, “Gen Ys appear to be financially switched-on and are focusing on property investment, with 40% of the respondents in this age bracket willing to forgo the First Home Owner Grant in favour of buying an investment property before a home. Meanwhile, the other 60% of the Gen Y respondents already own their first or subsequent home and are now looking to make an investment property purchase.”
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% of Gen Ys), followed by the perception that investing in property is more beneficial than the share market (47%) and rounding out the top three was the notion of planning for their retirement (43%).
“This younger generation of investors is looking for financial freedom and they see more profit in bricks and mortar investments,” said Melissa.
The decision to buy an investment property can see some first timers having to overcome a few hurdles. The greatest challenge for Gen Y first time investors as indicated by them was saving a deposit (42%), followed by finding the right investment property (29%) and choosing their investment strategy (15%).
“Finding the right property is half the challenge for most investors; the other half is saving the deposit and settling on an investment strategy that will help them to achieve their goals,” Melissa said.
Willing to sacrifice
Preparation and planning should be the first step in creating a sound investment strategy. Melissa said buyers need to be realistic about what they can afford and for some, buying an investment property may be impetus to cut back on some of their spending and lifestyle habits.
“While purchasing an investment property can be an extremely rewarding exercise, the mortgage that is typically tied to the property is obviously a large financial commitment, which takes careful long-term thought and action to manage properly. The right finance plan from the beginning can certainly pay off over the long term,” said Melissa.
“The survey shows 75% of Gen Y first time investors are choosing to make lifestyle sacrifices to help them achieve their property goals. The top five lifestyle 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.”
Bucking the trend
Melissa 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,” Melissa said.
If you want to learn more about your home loan options, call 0405 315 227, or log onto www.mortgagechoice.com.au/melissa.jackson.
For further information or to arrange an interview, please contact:
0405 315 227
*About the survey
Market research company Nine Rewards was commissioned by Mortgage Choice to conduct the 2013 First Time Property Investors Survey. The online Survey was conducted in late July 2013 and completed by 1,019 Australians who were purchasing their first investment property in the next two years. For the purposes of this survey, Gen Y is born between 1980 and 1994, Gen X between 1965 and 1979, Baby Boomers between 1946 to 1964 and Builders between 1925 to 1945. Note, the figures in the media release commentary have been rounded to the nearest whole percentage point.
This article is for general information purposes only. It has been prepared without considering your objectives, financial situation or needs. You should, before acting on the information, consider its appropriateness to your circumstances. About
Mortgage Choice has sourced a home loan for well over 350,000 people since 1992. It works with all manner of property finance borrowers via hundreds of franchises.
The company writes one in every 25 home loans in Australia by providing professional guidance on, and choice of, products offered by an extensive panel of leading lenders. Many of its brokers provide a broader service, helping customers source commercial and personal loans, asset finance, deposit bonds and providing referrals for risk and general insurances.
Uniquely, Mortgage Choice pays its franchisees the same commission rate for home loans they write, regardless of rate paid by the lender a new customer selects, working in the customer’s best interests to tailor a solution to them.
To cater to the growing needs of our customers, Mortgage Choice soft-launched in October 2012 its new financial planning business. Mortgage Choice Financial Planning will officially launch in FY14.
The company has no balance sheet or funding risk, and consistently delivers strong profits and attractive yields. It listed on the ASX in 2004 (MOC) and is a member of the Mortgage & Finance Association of Australia (MFAA). Mortgage Choice holds an Australian Credit Licence: no. 382869, issued by ASIC and Mortgage Choice Financial Planning Pty Limited, a fully owned subsidiary of Mortgage Choice, holds an Australian Financial Services License: no. 422854, issued by ASIC.