26 May Will Gen Y set the housing market direction? – Jennifer Duke
The number of Gen Y’s who own multiple properties is now on par with Baby Boomers and here is another startling revelation – they are buying them at a younger age. So how are they doing it? In today’s show Jennifer Duke, the Domain review editor, has the answers and she tells us more about what was revealed in the research.
Kevin: The number of Gen-Ys who own multiple properties is now on par with the Baby Boomers. According to the Domain Consumer Insight Study, 16% of Gen-Ys own two or more properties, compared to 17% of Baby Boomers or Gen-Xs.
Jennifer Duke is the Domain review editor. She joins me. Hi, Jennifer.
Jennifer: Hi. Good to chat.
Kevin: Was this a bit of a surprise for you, this result?
Jennifer: I was really surprised by the results of the survey. I thought it was pretty astounding, actually, especially when we’ve seen our parents’ generations very, very into property. I didn’t realize that it had come through Gen-Y so much.
Kevin: Yes. It shows a real sign of confidence in the market, too. The study also shows that younger generations are infiltrating the market at an earlier age, as well. How young are they starting out, and how does it compare with Gen-X and Baby Boomers?
Jennifer: What’s quite interesting is that the Baby Boomers are getting into the market around 45 years old, and then Gen-Xs are getting in 35, and now Gen-Ys are buying at 25. They’re getting in almost 20 years earlier than their Baby Boomer counterparts.
Kevin: Do you think it has a lot to do with their parents encouraging them to do it? I know with our kids, they got in very, very early, too, because we were encouraging them from our experience.
Jennifer: Definitely. I think, as well, seeing the benefit of compounding growth. Your parents have seen that go through the boom, and they say, “Boy, I wish I’d done it ten years earlier.” I heard my parents say that. I’m 24, and I have a property. You hear that while you’re growing up, and I think that your parents’ influence is definitely very strong.
Kevin: Yes, I guess a lot of the Gen-Ys have seen their parents’ wealth in their property, and they want to do the same thing. What are the other reasons for this confidence on behalf of Gen-Ys?
Jennifer: I think at the moment, obviously, low interest rates does play a big part in that, but I also think that it’s a general culture, as well. People are seeing prices increase so quickly that they want to be involved. Property culture is strong. The media, obviously, has never been stronger around property, and it’s just taken off. I don’t think it’s slowed down at all.
Kevin: What percentage of Australians have actually got an investment property?
Jennifer: It’s one in five at the moment. The majority of them just have one investment. I was chatting with someone earlier today who was telling me that the number of people having two is increasing, so that’s quite interesting.
Kevin: What also is interesting, I find, is in my generation, we bought a house for a reason, and that was to buy a home for the family, whereas this current generation seem to want it for investment purposes. In other words, they’re quite willing to continue to rent at home and buy an investment property.
Jennifer: Definitely. I know many of my friends rent and have investments further away, maybe in areas that they wouldn’t want to live in. We rent in Victoria; we have a property in Sydney – me and my partner – but we also just bought a block of land for our retirement way in the future.
It depends where you’re coming from, but I think most people want to retain their lifestyle. They want that café culture, the ability to close up shop and go traveling, and you can’t always do that when you own your own home, but you can do that when you have an investment and a tenant in there.
Kevin: You and your partner are right onto it, Jennifer, that’s for sure. Just in closing, I wonder if you can tell us – I don’t know if the survey went into this – how confident are investors about the future?
Jennifer: Two-thirds of Australians in the survey said that they considered it a good investment. I think what’s quite interesting is that a lot of people expect that there may be some sort of a downturn coming – it’s been a really hot market – but at the same time, over the long term, it pans out, and people think even if the next few years are a little bit rough, in ten years’ time, it will iron itself out and go up again.
I’m not really sure where I stand on it, but I think that property is a good asset to have.
Kevin: It’s great talking to you, Jennifer. Congratulations on what you’re doing, too. I think it’s a great report from Domain. It’s called the Consumer Insight Study. It is out now.
I’ve been talking to Jennifer Duke, who is the Domain review editor. I thank you so much for your time, Jennifer.
Jennifer: Thank you for having me.