One-third of Aussie millennials plan to buy a home by 2022
The goal of home ownership seems more attainable than ever for many millennials as a result of Covid-19 market conditions, according to a new report from ING.
The June study revealed one-third of Aussie millennials – those aged roughly between 24 and 39 – plan on buying property within the next two years, with 75% aspiring to someday own their own home.
Could the Covid-19 climate help millennials get on the property ladder?
Almost half of millennials surveyed agreed Covid-19 had made buying a house more achievable than it was prior to the pandemic.
ING’s head of mortgages, Julie-Anne Bosich says that while the current economic climate has negatively impacted many young Australians, it’s enabled others to make strides towards home ownership sooner.
“What this research suggests is many people, especially millennials, are being savvy by taking advantage of record low interest rates, government assistance and a weakened housing market to get on the property ladder,” Boisch says.
This reasoning tracks with current trends in Mozo’s database and other leading property research agencies. Mozo’s July home loans snapshot saw further cuts to mortgage interest rates, while CoreLogic recorded a month-on-month decrease in average national property prices.
Building up a deposit was cited as the main barrier to home ownership in the ING study, but it also revealed social isolation had forced many Australians to reassess their personal finances. Two-thirds of survey respondents said they were cutting costs on childcare, commuting and eating out during isolation, with 42% able to save more money while in lockdown.
Rethinking spending since lockdown
It appears millennials are leading this lifestyle cost-cutting. ING saw significant decreases in spending on things like personal shopping, drinking, date nights, gym memberships and commuting across all age groups, but in every category more millennials were curbing their spending than others. Notably, 59% of millennials said they were re-directing their travel budgets into a savings account for a home.
Henry, a 26-year-old communications professional based in Sydney, has had property on the brain since the lockdowns began.
“It’s something I’ve always had in the back of my mind as a goal. But as my partner and I have been lucky enough to retain our jobs since Covid and have been spending less in lockdown, saving enough for a home deposit in the next few years almost feels like a reality,” Henry says.
“For me it’s about security, both in having a place to call mine but also something which is hopefully an investment for the future.”
Like Henry, 22% of millennials are also aiming to purchase property for a sense of stability and security. But for almost half the cohort, the main reason is rental fatigue.
“Renting can be exhausting, financially and emotionally. Rent definitely feels like dead money – it goes to some often elusive landlord – and asking for a rent reduction is awkward and has so far failed for me,” Henry says. “But then moving to try to get a better deal is stressful and can be expensive if there are issues with your bond or if you have to hire cleaners and removalists.”
According to the ING report, millennials are willing to slog it out to escape these issues and the renting cycle. A third said they would take on a side hustle to earn additional income, as well as move back in with their families to minimise spending and reach their property ownership goals sooner.
Millennial home ownership essentials
Covid-19 has also had an impact on the kind of features millennials are looking for in their future homes. Fast internet is one of the highest priorities (40% are looking for that quick connection), alongside having an outdoor space like a balcony, garden or patio (37%) and area to exercise (27%).
Melbourne-based teacher, Emma, has become fed-up with her older rental apartment during isolation. She says her ideal first home would take less effort to clean – scrap that carpet and broken dishwasher – and be better insulated so heating and cooling wasn’t so difficult and costly.
“I would also love a little veggie garden and room for a dog. I grew up on a rural property and really do think animals and the natural environment improve wellbeing.”
The 29-year-old is also interested in investing in a more sustainable place to live.
“If I was looking at buying within an apartment complex, I’d be on the lookout for any kind of ‘green’ initiative,” she says.
“So a place to recycle soft plastics, community composting, book swaps and other things like that. Sometimes councils or independent shops offer these things, but like we’ve seen in iso, having options close to home is always a solid plan.”
This seems to be the trend for most prospective Aussie home buyers, with 68% in the ING study wanting more floorspace or a different kind of space to live in. Similar results were also seen in a recent Westpac report. Living somewhere less populated, near parks or shops and on a larger property were all top priorities.
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