Gen-Y employs novel ways to enter the market
September 01, 2015
Making that leap from renting to home ownership is never easy, but new research by LJ Hooker shows Generation Y is finding innovative ways to get its foot on the property ladder.
LJ Hooker’s Gen Y White Paper found there are a number of factors that have encouraged property hunters under the age of 30 to explore non-traditional ways of buying property, including; affordability, lifestyle choices, location and income and employment.
The various economic, social and demographic shifts have resulted in a number of non-traditional buying trends emerging for those under 30. Those trends are:
They love the lifestyle of where they’re renting, but can’t afford to buy in the suburb. Rather than abandon their lifestyle, they purchase a property in a more affordable area, using it as an investment while they continue to live as tenants in their preferred location.
Where younger buyers share the cost of buying a property with a friend, family member or business partner. The major decision here is how to structure the ownership arrangement.
Mr & Mrs fix it
Young buyers have looked to enter their preferred suburb by purchasing an older, smaller home at the bottom of the price scale. Renovating allows buyers to add rooms and levels as their families grow.
Build ‘em up
Heading to the fringes of cities for affordable house and land packages is another way for first time buyers to gain home ownership. For those not willing to compromise on location, purchasing a vacant lot and building from the ground up has also been popular.
Buy now pay later: Purchasing off the plan
Purchasing “off the plan” allows a buyer to put down a deposit on an apartment, townhouse or other new development and not have to deal with the mortgage repayments until construction is complete. This method allows buyers to keep saving or maintain their lifestyle until they move into their new property.
Thanks Mum & Dad: Using parents’ equity
Parents have ridden the property cycle, providing many with a hefty equity uplift or outright ownership of their homes. This has in turn allowed them to use their financial position to go guarantor on their children’s mortgage or stump up some cash to help out with the deposit.