Gen Y willing to skip first-home owners grant to buy an investment property

Many young potential property buyers are willing to forego a first-home owners grant in favour of buying an investment property as opposed to a home, according to a Mortgage Choice survey.

More than 40% of generation Y respondents to the first time property investors survey said that their planned investment property will be their first ever property purchase.

Most generation Y respondents, born between 1980 and 1994, were motivated to purchase their first investment property by the need to set themselves up financially for the future.

"Gen Ys appear to be financially switched-on and are focusing on property investment,” says Mortgage Choice’s Belinda Williamson.

Almost half of respondents said there is a perception that there is more benefit in investments such as property over the share market.

"This younger generation of investors is looking for financial freedom and they see more profit in bricks and mortar investments," Williamson says.

They are willing to make a number of sacrifices in order to realise their purchase though, with 18% of respondents willing to take on another job to make the purchase, while 41% said they would miss out on a holiday.

"Finding the right property is half the challenge for most investors; the other half is saving the deposit and settling on an investment strategy that will help them to achieve their goals," Williamson says.

"Our survey shows 75% of Gen Y first time investors were choosing to make lifestyle sacrifices to help them achieve their property goals. The top five lifestyle sacrifices included cutting back on general day to day spending, eating out less and limiting take-away food, missing out on a holiday, delaying a vehicle purchase and last but not least, cutting back on alcohol related expenses."