Young Australians still aspire to own a home and are willing to sacrifice their lifestyle to achieve this, a new study has found.
The Co-op Future Leaders Index white paper has found that 94 per cent of Australians aged between 17 and 29 years plan to buy a property within an average of five and a half years.
The report, which is the first of its kind, analysed the opinions of over 2,000 university students aged between 17 and 29 to uncover the needs and aspirations of the nation’s future leaders.
Chief marketing officer of Co-op Greg Smith said the findings indicated that Gen Y’s great Australian dream was well and truly alive.
“Buying a home is high on the list of priorities for them. They are already starting to plan for their futures, with many of them sacrificing spending to start seriously saving,” he said.
However, many were resigned to the fact that outright home ownership may never eventuate, with 80 per cent saying that the high cost of houses meant they may never be mortgage free.
“What this shows us is that Gen Y is both ambitious and realistic,” Mr Smith said. “They are acutely aware of the current state of the Australian economy and what’s going on in the property market. They know it’s not going to be an easy feat, but that doesn’t make the dream of home ownership any less important to them. That’s why we are labelling them Generation Sensible (Gen S).”
Director of RT Edgar Boroondara Glen Coutinho told Real Estate Business he agreed with the findings.
“They are definitely realistic,” he said. “We’re talking educated people who understand the market and generally come from families that also own real estate.
“A lot of them get assistance from their parents, who might put down half and then Gen Y will save the other half.
"It’s very easy to get funding. They can borrow up to 90 per cent, so really all they have to do is find 10 per cent. A majority of them have it because they’re semi-professionals and if they don’t, they have family who can help them. And the reason they’re doing this is that they think the market is going to be strong in the next five years, so if they don’t get in now, they won’t afford to be able to get in."
Director of hockingstuart Yarraville Leo Dardha said young buyers were making more conscious decisions about their purchases.
“I do think they’re savvy and they’re looking for the right deal. People are looking for more value, more bang for buck and that might mean that single front, or that double front, or even that block of land," he said.
He said an influx of buyers in their late 20s to early 30s entering his marketplace in the inner west of Melbourne was increasing the competition for properties.
“When you match affordability and desirability, it creates competition and that’s what the inner west offers,” he said.
The Co-op finding echoes a similar report by Mortgage Choice that found 74.7 per cent of Gen Y Australians were setting themselves up financially to be able to invest in the future.