A new generation of savvy first-time buyers emerging
I’ve been receiving more enquiries from prospective property buyers of late.
Mostly, they’re young people in their 20s, who are keen to start their property ownership journeys.
What’s interesting is that they already recognise the importance of strategic property investment.
In years gone by, young people generally bought whatever they could afford, usually close to where they grew up or somewhere that they were familiar with.
Property investing smarts
Over recent years, though, would-be property owners have come to understand concepts such as interstate investing as well as rentvesting.
These strategies enable young people to invest in property at the same time as living where they want to be.
Rather than having to buy a property on the outskirts of a city because it’s affordable, or a unit because it’s cheap, they are choosing to make sound investment decisions early.
This is a trend that has been growing over recent years.
Indeed, the 2019 PIPA Investor Sentiment Survey found that 45 per cent of investors generally were looking to buy outside of the State that they lived over the next 12 months.
The survey also found that the majority, at 63 per cent, of investors would consider rentvesting, which is renting in one location and investing in another, as a property investment strategy.
On top of that, one-third of first-time investors identified as “rentvestors” – where they’ve bought an investment property as their first real estate asset.
It is definitely heartening to see so many young people start to take charge of their financial futures earlier.
Plus, they are prepared to access expert advice and guidance to ensure that they don’t make a mistake with their first property holding.
Many also are not swayed by first home owner grants that rely on the purchase, or construction, of a new property because they already understand the concept of supply and demand impacting prices.
Recognising experts
First home buyers are definitely savvier than in decades gone by.
This may be because of the increase in online expert content available for them to learn about property investment strategies.
However, it’s vital that they can also differentiate between experts and spruikers.
One of the ways they are doing that is by searching for experts who belong to the relevant industry body, such as the Property Investment Professionals of Australia or PIPA.
I mention this because my PIPA membership was one of the factors – as well as my professional and personal property investment history and my finance background – that a recent new client considered before contacting me.
There’s no question that prospective home buyers are well aware of the ramifications of making a mistake with their first property purchase.
Plus, they are happy to buy an investment property as opposed to a home to live in.
Current market conditions are also ideal for first-time buyers with softer prices as well as fewer active investors in the market.
There are also historically low interest rates which are helping with loan serviceability calculations.
All of these are reasons why the number of first home buyers have increased nearly 20 per cent since June last year.
I believe the volume of first timers will continue to grow over coming months.
However, it’s the ones who stake their claim early who will be the best-placed to secure the top opportunities.
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