First-time home buyers opting to invest
One third of first-time buyers are opting to invest in property rather than buying a home.
New research from the Property Investment Professionals of Australia (PIPA) has found that 36% of first-time buyers are opting to invest in property and continue to rent instead of buying a home to live in.
PIPA chairman Peter Koulizos said ‘rentvesting’ as an investment strategy had likely been a trend for some time.
“What this insight shows us is that first-time property buyers, generally, have probably been more active over recent years than official statistics originally recorded,” he said.
According to the Australian Bureau of Statistics 18% of properties financed in Australia were to first-time buyers.
Mr Koulizos said revisions to the official data meant that first-time ‘rentvestors’ were now being counted.
“There’s no doubt that the softer market conditions are making it easier for first-time buyers when it comes to purchase prices, however, lending restrictions are conversely making it more difficult for them to secure finance,” he said.
“It seems that the dream of property ownership has remained alive and well for some time, with many first-timers opting to improve their financial futures by investing in more affordable locations while renting elsewhere.”
The research also found that the majority of first-time buyers had opted to buy an existing property, even with State Government grants available to purchase a new property.
"About 83% of first-timers purchased existing property with only 14% buying new or off-the-plan," Mr Koulizos said.
"This is partly due to affordability considerations with established properties generally available for lower prices points than new, plus the majority of all investors always prefer existing properties."