22 Dec First Home Buyers Turning to Rentvesting
Originally published 14 December 2016 by James Mitchell of theadviser.com.au
The number of first-time property buyers purchasing an investment over a home is increasing, according to new data.
The NAB Residential Property Survey Q3-2016 found that many young prospective property owners are opting to invest rather than take the traditional route of first home ownership.
First home investors made up about 12.2% of all new property sales in the third quarter of 2016, up from 11.1% in the second quarter, according to the survey.
It also found that first home investors represented 10.6% of all established property sales, an increase from 9.7% in the second quarter.
The results are a sign that young people still want to invest in property, but on their own more flexible terms.
They understand that the real estate market appears difficult to get into, but only if you’re strictly buying for security purposes.
First-time investors are now taking every opportunity to invest in real estate in a way that allows them to invest for reasons such as comfort instead of security, lifestyle instead of retirement, and versatility instead of restriction.
Generation Y, in particular, are choosing to become “rentvesters” instead of giving up on their dream of property ownership entirely.
Rentvesting involves investing in property in more affordable locations, including interstate if necessary, while continuing to rent in the inner-city suburbs where young people want to live.
This way, they’re having their property cake and eating it, too. They’re investing for their financial future without having to forgo any of the lifestyle factors that they want and desire.
According to ING Direct’s latest Financial Wellbeing Index, there is a growing number of young buyers in the 18 to 34 age bracket becoming property investors.
The index showed that 22% of Generation Y own at least one investment property, despite concerns about housing affordability, followed by 20% of Generation X and 19% of Baby Boomers.