While housing affordability has been everywhere in the news recently and even the subject of a parliamentary inquiry, a new report has highlighted changes in methods young people are using to break into the property market.
Released by the research arm of real estate agency LJ Hooker, the Youth White Paper highlights six non-traditional buying trends being used by young people to enter the market.
According to the report four factors; affordability, lifestyle choices location and income and employment are the reason young buyers are exploring different options to allow them to become owners.
The most prevalent new trend among young property buyers is what the white paper terms “rentvesters,” a trend which is a combination of affordability and lifestyle choices.
Buyers classed as “rentvesters” are those who are currently renting, but can’t afford to purchase a property in that location.
Rather than move away, buyers are purchasing property in cheaper areas and renting it out while remaining as tenants themselves.
The white paper also identified a growing number of young people are teaming up with friends, family or business associates to make purchasing a property easier, with joint tenancy and tenancy in common agreements becoming more
More and more young people are taking a hands-on approach to getting their dream home by buying older, smaller properties on the lower end of price scales.
This then allows them to renovate and extend the property as it suits them or they are able to.
Somewhat similarly, more and more young people are looking towards building their first home.
House and land packages are becoming more popular with young people as well as the idea of buying a vacant block and then building when they can afford it.
In a similar vein, an increasing number of young people have been found to be buying homes off the plan.
Their reasoning is that this allows them to place their deposit but not begin mortgage payments until construction is complete.
The final rising trend noted by the white paper is an increasing proportion of young buyers looking to their parents for assistance in buying their home.
The white paper highlights that the parents of many young people “have ridden the property cycle over the past few decades providing many with a hefty equity uplift or outright ownership of their homes.”
Because of this young, first time buyers are turning to their parents to either go guarantor on their mortgage or provide money towards a deposit.
Want to hear three first-hand accounts about how young people went about building their property portfolios? Then take a look at this segment from Channel 9's A Current Affair, featuring Your Investment Property Magazine editor Nila Sweeney.
Do you have more than $200k in your super fund? You could use your super to buy property - Find out how
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