Money

Somehow, Research Shows Aussie Property Investors Are Getting Younger

In today’s ‘huh?’ news, a report from Mortgage Choice has found that Australian property investors are getting younger. As to why this is surprising to the modern Australian, read on.

According to a 2016 investor study conducted by Mortgage Choice, 50.8% of investors were 34 years of age or younger when they purchased their first investment property. In comparison, just 33.8% of investors in 2013 were under the age of 34. That’s a pretty big jump to make in only three years, and you’re not alone thinking that it’s pretty surprising.

Wait – why is that so surprising?

Well, many reasons – the crux of it stems from the fact that it’s extremely difficult for people (bar the extremely wealthy) to buy property in Australia.

Even Mortgage Choice chief executive officer John Flavell was surprised by the new figures: “with property price growth outpacing wage growth over the last few years, saving a deposit and buying property has become very difficult for a lot of younger Australians,” he says. “Furthermore, the recent spate of investment lending changes has made it tougher – in some instances – for younger Australians to obtain finance to buy property.” You’re right on the money there, John.

Reading between the lines here, when John mentions those “investment lending changes” he’s likely talking about negative gearing.

Quick explainer: negative gearing is a tax incentive for investment property owners, where any losses you’re making on a property can be deducted from your taxable income (i.e. you pay less tax, which, in some cases, can even move you into a lower tax bracket). Moreover, this tax break has been touted as part of driving up property prices in Australia, which makes the dream of owning a first home out of reach for a lot of young Australians.

How has the number of young people owning investment properties spiked?

According to John, Australians understand the value of owning property and us young Aussies are keen to get our foot into the market door sooner rather than later. According to the stats, the majority of investors buying their first investment property are 25 to 34.

“Property prices have risen significantly across most markets over the past few years, which is great news for property owners,” says John. “This level of price growth ensures property owners – specifically property investors – see a great return on their investment.”

Mortgage Choice’s survey was completed by 1062 Australians planning to buy an investment property in the next two years, or had recently purchased their first investment property.

When asked why they want to own property, 13.2% of 25 to 34-year-olds said they wanted to plan for their retirement, 9.6% said they saw more benefit in property investment than other assets, but the main reason? 29.6% said they wanted to “set [themselves] up financially for the future”.

Arm yourself with information

Considering many of us have our sights set on owning property no matter how difficult the market is to crack, John advises to have a good understanding of the market hot spots to ensure a good return on investment. “Before buying an investment property, it is important to do your research and get a good understanding of the current property market. In your research, look for suburbs that perform better than others in terms of rental yields and capital growth.”

If you’re thinking about buying your first property (whether as a first home buyer, or as a budding investment property owner) here’s a few hacks to help you make that first step.


Rebecca Russo is a freelance writer, editor, community radio dabbler, occasional hiker and celebrity autobiography enthusiast. She has written for online publications including Junkee, AWOL, Fashion Journal and Tone Deaf. Find her online here.