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Australia

Homes our biggest priority - except for Gen Y

Forget marriage and kids - homes are top on the priority list for Australians.

An overwhelming 57% of people see owning a home as their biggest goal, according to the Westpac Home Ownership report, released this week. While travelling overseas is the main priority for 10% of people, getting married and starting a family only rate highly for 5% and 8% respectively.

However home ownership is also a more costly decision than in decades past. For instance, an average Sydney home was equivalent to five times the average annual income back 1973 and six times the average income in 1993, but has risen to around 10 times the average wage today.

"It's about [Australians] wish to have financial security before making other big decisions," explained Westpac's Retail Banking General Manager, Gai McGrath.

"Even when they are still studying, young people think about saving for a mortgage a decade before they start thinking about a family," agreed social demographer, Mark McCrindle.

Gen Ys buck the trend

A very interesting trend has evolved around Gen Y - those born between 1980 & 1994.

First Home Owners of this group are fast becoming First Home Investors.

Instead of buying their first home as their most important first major financial investment they are turning to buying an investment property instead, according to a Mortgage Choice survey. In fact, over 40% Gen Ys indicated their preference for buying an investment property first, before a home to live in themselves.

"Gen Ys appear to be financially switched-on and are focusing on property investment," explained Belinda Williamson of Mortgage Choice.

Shares seem to be losing out once it comes to investment preference for Gen Ys. "This younger generation of investors is looking for financial freedom and they see more profit in bricks and mortar investments," continued Williamson.

Buying a first investment property is so important to them that 18% would take on an additional job to afford their first property investment, while 41% indicated they would give holidays a miss to make this possible.

"Our survey shows 75% of Gen Y first time investors were choosing to make lifestyle sacrifices to help them achieve their property goals. The top five lifestyle sacrifices included cutting back on general day to day spending, eating out less and limiting take-away food, missing out on a holiday, delaying a vehicle purchase and last but not least, cutting back on alcohol related expenses," concluded Williamson.

Meanwhile marriage and starting a family are, as the top study showed, much further down on their priority lists.

 

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