A new study looking at housing affordability and Generation Y has found that young people are prepared to delay buying their first home for five years or more to ensure they can afford something that meets their expectations.
Melanie Thomas (pictured), an Honours student at Southern Cross University’s School of Commerce and Management, took a group of 18- to 28-year-olds from the Gold Coast and northern NSW to two display homes and then surveyed their opinions in an in-depth study to determine attitudes towards home ownership.
“The indication is that this demographic is prepared to significantly extend the amount of time before they buy a house rather than compromise their expectations,” said Melanie.
“For example, having an area to entertain friends rated as one of the most important considerations for this demographic when buying property, and most plan to wait until they are able to afford something that meets this need, rather than settle for second best.”
As expected, the research found that rising house prices and an increasingly high cost of living have hit the demographic hard, with the average age of first-time home buyers rising.
Reduced supply of housing due to increased investment-home-ownership by baby boomers, and an increasing reluctance by banks to loan, adds to the strain, with many young people pointing out that even with the lowest of standards, there is very little available for what they can borrow.
But Melanie said that despite the current credit crunch, it was important to understand the needs of Generation Y.
“The evidence suggests that Generation Y will delay buying housing for some time, but not forever,” said Melanie.
“If the economic landscape is favourable, there is likely to be a rush to buy into the property market as this demographic reaches a certain age and level of affluence.
“There has been very little research into young people and housing but they represent a large market.
“The more that is known about the attitudes and behaviour of Generation Y, the better prepared investment companies, developers, banks and others can be to look after their needs when the time comes — and the better service they will receive.”