New world for Gen Y buyers
are no doubt fully aware that I do not fall into the Gen Y age demographic and I acknowledge that the market, legislation and house buying process was a very different beast in the pre-millennium decades.
Those under 35 are facing a very different and challenging property purchasing era than I did and my parents before. I was about to include grandparents in that list but, in reality, home buying and selling for that generation would be unrecognisable when compared to the modern housing market.
The struggle to find a permanent home for the younger generation has been an uphill battle in previous generations too, so it is nothing new. The difficulty for gen Y right now is you are comparing your experiences to those of buyers and sellers in the last three to four decades, around and before the millennium.
I can understand the frustration felt by so many now, watching true affordability disappear in the wind. Competition to buy homes in key areas has increased as overseas purchasers dip their wealthy toes in our pond, while the massive increase in homegrown investor activity gnaws away at our housing stock. Add in our major cities seeing double digit capital growth in recent years and that stamp duty cost, which can hit you hard when there are no incentives available.
I bought my first house at 18, admittedly with a little windfall from my grandmother, which was enough for a 5 per cent deposit. I would like to mention the house was filthy and in a state of disrepair. It pushed me so much financially that I was the 18-year-old that could never afford the second beer; the guy compiling my own music on a supermarket brand of C90 cassettes; and for whom “clubbing” was limited to free entry venues, midweek.
So what lies ahead for the next decade or two?
Well, I do not believe the capital growth percentage will give homeowners and investors the returns we have witnessed previously; buying a home is certainly for the more mature now. If you are a twenty- or thirty-something wanting to buy, or even a parent willing to share some of your equity to get your kids started, consider the following:
Affordability is possible for many, the compromise might just be the size, type, or condition of the property.
Don’t expect quick profits. If you are able to buy where you want to live, securing a property there could just be the start. You can extend or renovate in years to come; it does not have to be completed immediately.
Acknowledge home ownership is not for everyone. The challenging years ahead may mean you make a conscious decision to delay the process until later. This may not be as disastrous as you think. For many wealthy types, the accumulation of property equity occurred nearly by chance; timing and patience paid off.
So, should you be more realistic with not only your property expectations but the financial gain it may or not make?
I would say a resounding yes. But please don’t panic as you should enjoy the process.
THE BIG INVESTMENT: Affordability for your first home is possible for many, but the compromise might be the size, type, or condition of the property.