They could be forgiven for being pretty pessimistic, but for the majority of young Australians, the Great Australian Dream of home ownership is still very much alive.
New research by mortgage brokers Loan Market – whose parent company the White Family own Australia’s largest real estate network Ray White – reveals for Gen Z and Millennial buyers, homeownership still represents financial stability, independence and long-term wealth, with many hoping to own their own home outright before they retire.
A survey of 1000 people in January revealed 72 per cent of Aussies felt owning a home was important, with 58 per cent planning to own their own home before their retirement.
Almost half (47 per cent) viewed property as the best way to build wealth, compared to stocks and shares (12 per cent), bitcoin (5 per cent) and exchange traded funds (5 per cent)
Interestingly, almost six in 10 (56 per cent) of those aged 18 to 24 said owning a property was critical for financial success.
Loan Market mortgage broker Caleb Bax.
Loan Market spokesman and mortgage broker Caleb Bax said home ownership was more important than ever for many – particularly the young.
“A lot of them are looking for that stability and not wanting to rent anymore, they’re not wanting to pay someone else’s mortgage off and they are looking at getting into it as a wealth creation thing, especially more in the last couple of years because obviously we’ve seen all this crazy growth,” he said.
The research showed the importance placed on home ownership as a wealth creation tool increased with age, with 69 per cent of 25 to 34-year-olds believing it was important, with this figure increasing to 73 per cent for 35 to 44-year-olds, 75 per cent of 45 to 54-year-olds and 79 per cent of 55 to 64-year-olds.
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According to the figures, 47 per cent of Australians felt property was the best investment to build wealth for retirement, while 12 per cent believed stocks and shares were the best option, and 5 per cent felt Bitcoin was the way to go.
Interestingly, that confidence in property differed across the age ranges, with 32 per cent of those 18 to 24 favouring investing in property for retirement, compared with 38 per cent of those aged 35 to 44 and peaking at 41 per cent for those aged 25 to 34.
Turner Real Estate managing director Lachlan Turner said young buyers will still be able to negatively gear properties and use property as a wealth-creation tool, and could benefit from changes to capital gains tax.
Turner Real Estate managing director Lachlan Turner
“Looking ahead, investors wanting to expand their portfolio will still have opportunities in the new‑build market, where negative gearing will continue to apply to encourage additional rental supply,” he said.
“The Treasurer made it very clear that there was still a lot of detail to work through in the transition arrangements for CGT changes.
“Understanding more detail on these changes will be critical to help investors understand exactly how it will affect them.”
Steven Sabarre and his partner Faye Vo in their unit at Largs Bay they recently purchased. Picture: Mark Brake
Production systems administrator Faye Vo, 23, and partner, business manager Steven Sabarre, 25, have recently purchased in Largs Bay, South Australia, after a two-year journey and say it was the next step towards them building their wealth.
“Coming from an immigrant family it was a huge achievement to obtain an asset,” Ms Vo said.
Mr Sabarre said the couple had originally wanted to buy a three or four-bedroom new build, but had changed tack as they went on.
“We’ve settled for a strata-titled unit and that’s OK with us because that will be a launch pad to what we actually want,” he said.
“There’s still safety in bricks and mortar.”
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