New research shows Gen Ys choose property over holidays
Generation Y would sacrifice holidays and electronic gadgets to afford their first home
Generation Y, aged 20 to 30 years old is serious about property and would sacrifice holidays and electronic gadgets to get ahead in the housing market, according to recent research from LJ Hooker Finance, a division of trusted real estate brand LJ Hooker.
The survey, conducted by Galaxy Research on behalf of LJ Hooker Finance found that Gen Ys account for 78 per cent of those intending to purchase a property in the next two years. Almost one in three view property as a good investment.
Janusz Hooker, CEO of LJ Hooker said, “Gen Y often receives a bad rap for staying at home and avoiding long term financial commitments, such as property. However, our research shows that this perception is misguided.”
According to the research, if they had a windfall of $10,000, over half of Gen Ys would put towards their home loan deposit, 13 per cent would pay off debts and only eight per cent would spend it on shopping or holidays.
Further dismissing the stereotypical view of Gen Y, only four per cent of respondents say they have it too good at home to consider buying.
“Gadgets, holidays and mum’s great cooking are no hindrance to getting Gen Y out of home or the rental market and into home ownership. However, affordability and a lack of financial knowledge are challenging Gen Ys bid to buy,” said Mr Hooker.
One in three first time buyers said saving for a deposit is the number one barrier to buying a property.
“In greater Sydney region where the median property price is around $550,000^, it’s not surprising that affordability is one of the biggest hurdles, but many would-be buyers don’t have a clear idea of their financial position or strategy,” said Mr Hooker.
Despite a home loan being the biggest single financial commitment for most, less than one in five Gen Y first home buyers said they had sought professional advice from a broker.
“Whether you’re a first time buyer looking for a sound investment or to accommodate a family, it’s important to think strategically about that first step into the property market and seek expert advice.
“For example, LJ Hooker Finance has brokers in each state and territory that can first home buyers to plan and prepare for their entry into the property market by assessing their financial position, discussing deposit requirements, the loan process and outlining repayment requirements,” said Mr Hooker.
The LJ Hooker Finance research also asked current home owners what advice they would give to first home buyers with the benefit of hindsight. One in five said first home buyers should buy if they are ready, not to wait for perfect property market conditions.
Mr Hooker believes this advice is particularly relevant for first home buyers in NSW who want to take advantage of the government’s current stamp duty concessions which expire at on 31 December 2011.
“Gen Ys are excited to get into the property market but need to stop relying on internet research and see a broker for expert advice. A broker can help first home buyers realise it’s not as hard to get into the property market as they think,” said Mr Hooker.
Key findings from LJ Hooker Finance Research on first home buyers
- Gen Y comprises 78 per cent of those intending to purchase property in the next two years
- Over half say that if they won $10,000 they would put it directly toward their home loan deposit
- One in three say saving for a deposit is the number one barrier to buying a property (Gen Y make up 79 per cent of this group)
- Four per cent have it too good at home to consider buying
- First home buyers in NSW are the most likely to find saving for their deposit a barrier to buying a property (42 per cent)
- One in four current home owners would advise first home buyers not to wait for the right time but to buy if you’re are ready
- 21 per cent of home owners recommend talking to a professional
- Investment is a driver for 29 per cent of Gen Ys
- One in five will buy a home to raise a family
*Galaxy Research conducted on behalf of LJ Hooker Finance in September 2011. The study was conducted among 1017 Australians, aged 18-64 years and over who were active in the property market.
^ ‘RP Data-Rismark Hedonic Home Value Index Results’, National Media Release 31 October 2011