The Very Clever Next Generation - April 2019

By Rich Harvey, CEO & Founder propertybuyer

Having a dig at millennial's seems to have become a national sport in Australia. You’ll see it claimed by older folks that Gen Y's are, ‘A lazy, impatient, self-obsessed group of spoilt youngsters with no work ethic and lousy taste in music!’

Of course, trying to encapsulate an entire generation in flippant prose does nobody no favours. People are more complex than we often like to admit, and defining their character simply by the numbers of years they’ve been on the planet is just plain wrong.

In fact, today’s millennial's have plenty to contend with – and research shows many young Australians are incredibly hard-working, ambitious and future-focused.

Gen Y's face a number of challenges, and one of the biggest is finding a way toward property ownership during a period of high prices and tough finance.

Rather than lay down and take it, many are stepping up. They’re unearthing ways to crack the market and show the rest of us why they shouldn’t be underestimated.

Mortgage mates

The rules no longer apply when it comes to millennial's. That’s why the term ‘disruptor’ was born.

Necessity is the mother of invention, and one of the most interesting trends to emerge in the fight for affordability has been friends pooling resources to buy property.

I recently heard about a new term adopted by the now generation – ‘framily’. Basically, it’s when young friends view each other as a type of the family unit.

They extend life beyond being just housemates for example. They travel together, sit down for meals, share emotional highs and lows and support each other like blood relatives.

Some ‘framilies’ are choosing to tie their finances together as well by entering the property market as a team. It allows singles to have a dual income. They can pool their resources and borrowing power, as well as share responsibilities.

Some do it to get a foot on the owner-occupier ladder and live together as cohabitants. Others do it as co-investors – mates who find a property with good long-term fundamentals that can help boost their combined future wealth.

It can be a brilliant solution where the whole is greater than the sum of its parts.

My observations, however, is that the most successful arrangements are backed up by a solid plan and professional advice to make sure everyone if on the same page.

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The app age

Not surprisingly, this new generation drives use of technological frontiers, and making the most of the online economy is key to boosting their financial position.

Take Airbnb for example. Who’d have thought a few years back you could earn a couple of extra dollars by opening the doors of your spare bedroom to strangers from faraway lands?

I’m coming across a lot of young first-timers who are turning that extra space into additional income to help offset their debt or service their loan. It’s not only a great strategy, it’s also a bit of fun and a touch worldly.

I’ve even heard about one youngster who’s not quite ready to have her boyfriend move in, but happily stays at his place on weekends and rents out her entire city apartment for short-stay.

It’s not just Airbnb either. There’s a whole host of apps and websites allowing young homeowners to find boarders looking to rent out spare rooms for short, medium and long-term arrangements.

There are a few income tax and body corporate considerations to allow for, but it’s still a sign of how willing young Australians are to make it work.

Of course, there are other ways the online economy can help people to boost their income and relieve the pressure of loan repayments.

From doing odd jobs on AirTasker or Freelancer, renting out their auto to others via Car Next Door, pet-sitting and dog-walking on Pawshake, and advertising unused or frequently available car parking spaces.

Every dollar helps and smart millennials are absolutely maximising their chances of getting ahead.

Bank of mum and dad

This particular financial institution is not new, but there is probably less stigma about relying on the folks than there was a decade or two back.

Let’s face it, this generation’s parents have done pretty well in the property market. They’ve enjoyed successive market cycles that have generated a stack of wealth in equity.

Now they’re paying it forward by helping out the kids, via gifting or lending money for deposits, or going guarantor on loans.

Mum and dad want to see their offspring make a start in the world and place their foot on the property ladder. They also know, from experience, the enormous value of real estate as a future wealth-builder.

There are some considerations, for sure, but if everyone is on the same page and has a clear agreement in mind about the conditions of the loan, this sort of assistance can work out particularly well for all involved.

Time on their side

Smart young buyers have a distinct advantage over their older property rivals too – time to wait out the market and enjoy longer-term capital gains across multiple cycles.

Ahh… the joy of youth! Many have learnt early it’s best to act ASAP and get hold of a property, safe in the knowledge that value gains over many decades will bode well for their future selves.

But it’s critical at this first step to buy the right property, in the right area and for the right price.

In fact, it doesn’t matter whether it’s a place to live or for an investment. A qualified, independent and experienced buyer’s agent is crucial from the get go of your property journey. We can help you seek the best opportunities for your first purchase, assess their potential and make sure they fit your needs now and in the future.

As expert’s, we can negotiate directly with the agents so that you don’t have to, and avoid the tricks and traps.

Young buyers are savvy, and those who succeed have a knack for finding the right help early, so they can benefit from others’ experience and enjoy an enviable future.

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