Young buyers belonging to Generation Y have intentions to enter the residential property market in the next five years, however housing affordability and saving a deposit are some of the biggest barriers that they face.
This information comes from new research released by Australian retailer Co-Op. The whitepaper, titled The Future Leaders Index, included over 2,000 respondents aged between 17 and 19 years old.
A clear majority of the respondents (94 per cent) stated that they have plans to buy houses for sale in the next 5.6 years so that they can obtain a secure and profitable long-term investment.
However, 66 per cent of these respondents stated that the level of housing affordability is what they perceive to be the biggest issue.
Despite the high costs associated with buying homes for sale and the ongoing debt, this generation of buyers state that homeownership is as important to them as it was to their parents.
Housing affordability is a growing problem for real estate in Australia, with residential property prices continuing to climb higher throughout the year.
This has likely been fuelled by the recent rate cuts seen over the last 18 months, spurring the confidence of buyers. In turn, this has driven up house prices in many areas across the country.
Furthermore, another survey from Mortgage Choice has shown that a number of Australians belonging to Generation Y are thinking of buying a rental property as their first home purchase.
The 2013 First Time Property Investors Survey included over 1,000 first time investors, with 34 per cent of them in the Generation Y category.
Two-fifths of this generation stated that they have plans to buy an investment property as their first home, rather than use the First Home Owners Grant to purchase their own home to live in.
However, 42 per cent of Generation Y respondents said their biggest difficulty would be saving up a deposit for the property. This ties in again with the issue of housing affordability in the country.
"Gen Ys appear to be financially switched-on and are focusing on property investment, with 40 per cent of the respondents in this age bracket willing to forgo any available First Home Owner Grant on their first property purchase in favour of buying an investment property as opposed to a home," said Mortgage Choice Head of Corporate Affairs Belinda Williamson.
