A new study from Mortgage Choice reveals more Australian first home buyers are choosing investment properties rather than homes to live in. According to the research, 36.6 percent of property investors are first home buyers, compared to just 21.1 percent last year.
When queried about their purchase decision, more than a quarter of the respondents said they bought an investment home because they felt it was more affordable than buying a home for them to live in. Roughly the same amount said they just wanted to enter the property market. Approximately a fifth of first home buyers surveyed said their purchase decision allowed them to buy in an area they could afford while living in a location they wanted to be.
It may seem like an unusual trend giving the rising cost of rentals, but John Flavell, the chief executive officer of Mortgage Choice, said he wasn’t surprised by the study’s findings.
“Australians increasingly want to live close to work and where the action is, which is why most people like to live as close to the capital city centres as possible,’’ he told news.com.au.
“Of course, with prices rising across most capital cities, purchasing property near or close to the city is becoming increasingly difficult for buyers — especially first home buyers.’’
In a new white paper about the trend it calls rentvesting, real estate firm LJ Hooker said more people were changing their buying habits to suit their preferred lifestyles.
“Young buyers have also looked to try to fund their current lifestyle by becoming investors, searching for positively geared properties to boost their regular income,’’ it said.
“This buyer is currently renting and loves their lifestyle and doesn’t want to relocate from the area where they are presently living. The problem is that they can’t afford to buy in this area. Rather than disrupt their current lifestyle these buyers purchase a property in a more affordable part of the city or country, and rent that property out while they remain as tenants in their current location.’’
The rentvesting trend shows that you’re never too young to think about property investment. Contact Chase Edwards today to learn how easy it really is to become a property investor.