Why Gen Y isn’t buying homes

As the one generation looks to retire while the other is soon to be at its peak earning potential, the opinions and approaches to the property market differ markedly between Gen Y and Baby Boomers.

Place Advisory’s Lachlan Walker says the two generations prefer different types of property and have different reasons for entering the property market.

Walker says that Baby Boomers, unlike their Gen X and Y proponents, tend to have married in their early 20s and subsequently became home owners early.

Born between 1946 and 1965, boomers are the richest generation, having cashed in on several property booms. They hold over half Australia’s housing and financial assets.

Gen Y, which encompasses those born between 1981 and 1995, are nowhere near as asset rich.

“As travel is now more affordable and desirable, this demographic is often choosing to spend their money on seeing the world rather than being tied down to a mortgage,” Walker says.

“While this generation is often referred to as ‘Generation Rent’, this isn’t necessarily to do with affordability… they like the flexibility that comes with renting.”

Walker adds that Gen Ys favour apartments.

“Many Gen Ys who choose to buy into property are using it as an investment vehicle,” says Walker. “Data shows that 52% of Gen Y buyers surveyed are planning to buy an investment property instead of a home to live in during the next 12 months.”

In contrast, Baby Boomers are generally looking for a home. They may also be increasingly trending towards apartments, but want larger units with quality fittings and finishes.

“With more disposable income due to their children having moved out of home, Baby Boomers are looking to buy apartments within close proximity of entertainment and dining precincts.

“They want the three A’s – action, accessibility and amenity – rather than the three traditional P’s – product, price and position.”

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Comments
  • Gen whY doesn't it fair for us? says on 17/12/2013 01:27:59 PM

    Not entirely true - I'm a Gen Y and brought a townhouse when I was 25 a few years ago when the first home owners grant was 14k (and hence the bulk of the deposit). I've regretted that decision ever since. Over 1/2 of my income goes to the mortgage, while my mother was paying less than 1/4 of her wage of her age when she brought a home when she was 25 (and was still travelling the world at the same time). After a nasty divorce, she now has no assesses, no income and lives with me. No one wants to hire someone who's in their 60s....

    My friends are travelling the world, have new cars, have cash to burn and are living rent free in their parents investment properties (Who wouldn't travel when living rent free!!).

    In this economy, our generation choose to either travel, or buy a property. We don't have the choice of both. This is always overlooked when I read these articles.

  • Jose says on 17/12/2013 01:54:01 PM

    So in summary... your friends are parasites.

  • Vladimir says on 17/12/2013 03:36:39 PM

    Everything in this article said is just to cover up the real problem of housing affordability and property bubble! I am one of generation Y, and I can not afford myself buying a house just to live in. To be able to do so, you at least have to have a wife who is also working on 2 jobs, like me!
    And you are telling us the stories about investment and travelling overseas rather than buying a house!

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