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As the affordability crisis continues to drive property ownership out of the reach of Gen Y, Australia is experiencing a rise in rentvesting. First home buyers and downsizers are now the primary force behind apartment sales, as they turn to renting while purchasing out of city centres.
Whether it’s all the smashed avocado on toast or not, nobody can deny that Gen Y are unlikely to be able to afford to purchase property in the booming capital city markets.
But all is not lost for young people looking to gain footing on the property ladder, many are choosing to rent near employment hubs and purchase property in semi-rural areas where the prices are more achievable.
“Over the past six months, Spring Financial Group has experienced more than 1,500 people a month wanting to learn more about ‘alternate strategies’ like rentvesting, parents helping their kids or using super to enter the market or grow their portfolio. This represents nearly 70 per cent of its overall first home buyer and property market inquiries,” said Spring FG’s head of advice services, Frank Paul.
“The decision to enter the property market is very different to what it has been in the past, and the nature of modern living and an increasingly transient workforce is redefining the nature of property investing. Price isn’t always the only consideration, but affordability is an issue if you are seeking to live in inner city areas within Sydney, Melbourne or Brisbane,” said Mr Paul.
According to Urbis, Gen Y and downsizers are driving the apartment market, in Sydney there has been an increase in apartment sales as a percentage of total house sales of 15 per cent since 1980.
The increase is even greater in Brisbane, apartment sales now make up 38 per cent of total house sales, compared to 11 per cent in 1980.