Who are Australia’s property investment demographics?

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May, 2017 by

At the end of March, the Australian Prudential Regulatory Authority (APRA) announced the end of property investment. Well, almost – it introduced some strict lending measures, which will make it much more difficult to secure an investment home loan without significant existing capital.

APRA stated that, in particular, it wanted to curb interest-only lending as the housing market wasn’t completely stable. But who does this actually impact? Let’s look at who Australia’s property investors are that have been sorely impacted by these macro-prudential regulations.

Families building wealth

Investment property forms a foundation for families with young children, CoreLogic research reveals. In a May 29 article, it outlined that 18 per cent of baby boomers and 19 per cent of Gen X were property investors, while 22 per cent of people with rental property in Australia had kids between 5 and 17.

Meanwhile, Millennials were the least-represented adult demographic in the property investment sphere, with 12 per cent of this group owning rental real estate.

12 per cent of Millennials are currently property investors.12 per cent of Millennials are currently property investors.

Kyle Davis, Head of Property Services Marketing at CoreLogic suggested that older generations are more able to invest because they have paid off more of their mortgages, and therefore have significant equity to leverage into second or third real estate purchases.

However, with just a fifth of Gen X and baby boomers taking advantage of this, could there be more room for people to use their family home as a building block in a long-term investment strategy?

Finding ways through the roadblocks

While investment for existing home owners may be simpler than they think, first-time buyers have larger obstacles to work through. CoreLogic’s research shows that for Millennials, the biggest impediments to buying property in Australia are:

  • Securing a deposit (49 per cent agree)
  • Interest rates (44 per cent)
  • Job security and loan approval (both 41 per cent)

So clearly, the road to buying real estate or becoming part of those investor demographics is about more than having equity in your home. To get started on the property ladder, many variables have to come together – and it’s difficult to do it alone.

Whether buyers are looking for an inner-city apartment or a quarter-acre block on the outskirts, working with professionals that understand how to overcome obstacles is key. For more information on finding the right property and getting on the ladder, contact the professionals at Raine & Horne.

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