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More and more first-time buyers are getting into the property market but are continuing to live with their mum and dad, one property expert believes.
A new generation of first-home buyers are getting into Melbourne’s property market but are continuing to live with their parents, one property expert believes.
After a busy weekend of auctions across Victoria, Barry Plant partner Mark Lynch said he’d noticed a new group property investors who could afford to buy their first home, but couldn’t afford to live in it.
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Mr Lynch said there was a generational shift occurring in how younger buyers were approaching real estate.
“It really is impossible for the next generation coming through to turn 18 and leave home, it’s too expensive,” he said.
“And then for them to buy that first home, it really often means we’ll buy it but we’re going to rent it out for the next five years while we continue to live with mum and dad to save.”
On top of this, he said rental vacancies were also at an absolute historical low, but for those deciding to lease their investments, there was a very steady flow of people wanting to rent.
“For the younger generation that are in that 20-25 age bracket, it’s really difficult to get a rental property,” he said.
“For investors coming back into the market, they’re getting a pretty good return, certainly their return on how much they’re getting per week is well up.”
Melbourne’s preliminary clearance rate was 61.1 per cent from 380 early results over the weekend.
He added that there were an average of four bidders per auction over the weekend, and buyers weren’t holding back.
PropTrack records showed a preliminary clearance rate was 61.1 per cent from 380 early auction results out of 832 properties that were scheduled to go under the hammer in Melbourne over the week.
However, Little Real Estate executive general manager James Kirkland said at their real estate firm, property investors in Melbourne were selling up more than any other city.
“The reason for that is that the state government is making it harder to hold assets in Victoria right now,” Mr Kirkland said.
This state government introduced a number of property taxes in 2023, including decreasing the tax-free threshold from $300,000 to $50,000 and new taxes on vacant land.
Mr Kirkland said Melbourne property investors were selling up more than any other city.
But Advisable buyer’s agent Kate Hill said now was the time to invest in Victoria because there was less competition from other investors and the fundamentals of the nation’s second most populous state remained overwhelmingly positive.
“In the grand scheme of things, property expenses and taxes are part and parcel of owning investment properties over the long-term and they are tax deductible,” Ms Hill said.
“The key is to recognise that Victoria continues to be a sound property investment location with solid prospects for cash flow and capital growth over the years ahead.
“The smartest investors are cherrypicking the best opportunities in Victoria that offer superior upside potential for anyone who is prepared to look past the current rental reform and tax agenda.”
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sarah.petty@news.com.au