The old investing clichés holding Gen Z and Millennials back

The difference is context. At the peak of rates in the mid-1990s, just 34 per cent of Australians spent more than a third of their income on housing. By 2023–24, that figure had risen to 46.7 per cent.

This means we are in a radically different housing market.

The implication is clear: old assumptions about home ownership no longer apply. New investors need new rules of thumb.

And I’ve personally learned this the hard way with my apartment in Sydney. The wrong asset class, bought at the wrong time.

Timing the market or time in the market? It’s a bit more complicated.

Property is not a get-rich-quick scheme, despite how the past few years may have made it look. Yes, some investors were fortunate enough to pick multiple hotspots in succession.

But luck is not a strategy. Nor is relying on a long-term hold.

Nothing is a substitute for sound asset selection built on fundamentals:

• Incoming supply

• Long-term economic demand

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• Asset selection

Across Australia, there are postcodes where properties sell for less today than they did a decade ago. These are most commonly in areas with high unit supply.

Screenshot from realestate.com.au

It’s so common that you can select almost any listing in the Parramatta local government area (LGA) and see sold histories like the above.

But this loss is more than just the $49,000 headline figure. To see the real damage this has on the back pocket, you have to add years of strata fees, periods of vacancy, council rates, water bills, maintenance, stamp duty, agent fees, and marketing costs.

More importantly, it represents a lost opportunity. Capital tied up in an underperforming asset could have funded multiple established homes in stronger-growth markets.

There’s a real cost to buying anything just to say you’re “in the market”. Which leads us to our next lesson.

“Just get on the ladder.”

Stamp duty, selling costs, and holding expenses can easily erode gains if the only goal is to get a foot in the door – as we saw above.

However, one of the bigger risks often overlooked is falling into negative equity.

The federal government’s 5 per cent deposit scheme for first home buyers reduces the time needed to save a deposit and waives lenders mortgage insurance (LMI). But with Sydney prices stretching up to $1.5 million for the scheme, stamp duty alone can exceed $65,000.

Once holding and selling costs are factored in, buyers will need years of strong price growth just to break even.

There’s also a structural risk. A 5 per cent deposit often requires a dual income to service the loan, increasing vulnerability if one partner loses work or takes time off for family.

“Buy blue-chip suburbs, they never go backwards.”

Blue-chip suburbs are appealing. There’s prestige in buying into a highly sought-after area, particularly if a tenant is helping service the mortgage.

But blue-chip markets are usually the first to grow, meaning that investors risk buying into an asset after the best gains have already occurred.

According to Cotality, in December, house prices in the upper quartile rose by just 0.2 per cent, while the lower quartile increased by 1.1 per cent.

Long-term growth still matters. But price paid, timing within the cycle, and future upside matter more.

Don’t listen to your uncle at the family barbecue. Think for yourself.

Buying property is harder than it used to be, which is exactly why Gen Z and millennial investors need to be more strategic, not more sentimental.

Many of the assumptions that shaped the Gen X investing playbook no longer hold.

And in my personal case, blindly following old advice can be more dangerous than doing nothing at all.

In today’s market, independent thinking isn’t optional; it’s essential.

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