Younger Australians have significantly changed their buying habits because of affordability pressures and lifestyle concerns, according to new research.
The LJ Hooker Youth White Paper found that under-30s have embraced “new and innovative buying habits” to enter the property market.
This has seen first home buyers “fly under the radar”, according to the report, and led to an under-reporting of their numbers and changing habits.
The report said the most common new buying habit is that of the ‘rentvester’, who invests in a cheaper suburb while continuing to rent in a more expensive and desirable location.
Another approach is to partner with family or friends to buy a larger property to co-inhabit or as an investment, it said: “The major decision here is how to structure the ownership arrangement. The two most common are as tenants-in-common or joint tenancy.”
Some young families who can’t afford to buy a larger home in their preferred area are choosing to purchase an older and smaller home, then add rooms and levels.
Other young families are abandoning their local area in favour of a newly built suburb, according to the report.
“This has seen demand for house-and-land packages in new estates rise considerably over the past few years,” it said.
“For those not willing to compromise on location, purchasing a vacant lot and building from the ground up has also been a way to remain within their preferred area.”
Another trend identified by the report is for younger Australians to buy an off-the-plan apartment, so they can postpone their mortgage repayments until it’s been built.
“This has been popular with the under-30s as it allows them to keep saving or maintain their lifestyle in the short term until they move into their new property,” the report said.
“This has also been popular for the younger generation of investors who want to lock in today’s price and capture the capital growth over the construction period.”
[Related: What can be done to help first home buyers?]