Preparing for the future requires young people to get smart.
Every generation rebels against its elders. Battlelines are drawn over voting, music taste and how to spend your money wisely. Australia’s own baby-boomer versus millennial conflict is largely associated with housing affordability – the older generation believing those in the younger generation need to tighten their belts to make buying their own place achievable. But there are some less-traditional methods that today’s young home buyers are employing to find a place to call their own. While creative, they highlight the sacrifices being made to get into the property market as house prices continue to skyrocket.
Despite boomers’ calls to cut back on excessive spending, data reveals millennials are actually spending less than any previous generation on food, drink and recreation. Couple this with a record high income to housing price ratio, and it’s easy to see why young people are getting desperate. So what solutions exist? Well, taking up less space is emerging as a popular path forward.
Tiny houses are becoming an increasing trend around the world for those looking for cheap and environmentally friendly solutions. Brisbane locals Lara Noble and Andrew Carter recently moved in to their dream tiny home. It’s only 18 square metres inside – but still contains a kitchen, bathroom, bedroom and a foldout bench that doubles as a desk and dining table. Tiny houses use less power and so, have little to no carbon footprint. And as a major bonus, new technological advancements enable them to be 3D printed, saving on construction and materials costs.
But for those who need more space, sharing is slowly becoming the norm; and not just when it comes to renting. Getting money together for the deposit on a house is a huge investment. So, across the world, many young people are co-financing a mortgage and sharing ownership of a property. Such a commitment requires strong trust and transparency between all parties but the payoff is a greater sense of community in a home. Urban Coup is an Australian company creating shared living spaces to capitalise on this. They manage co-housing spaces around Australia that are collectively owned by community groups and share facilities like BBQs, rumpus rooms and veggie patch gardens to foster a connection between tenants.
Young people need to be looking to buy property in areas that are experiencing growth.
Associate Professor Bill Dimovski from Deakin University’s Faculty of Business and Law, says that preparing for the future requires young people to get smart. He says they’re going to have to use digital tools and keep an eye on trends if they want to forge a credible path to home ownership. ‘Young people need to be looking to buy property in areas that are experiencing growth. They can use tools like realestate.com.au to assess property values from other houses, track market growth and work out where they should invest,’ he says.
Assoc. Prof. Dimovski’s advice is already working for a number of savvy young people who are tapping into emerging markets and investment properties as paths to homeownership. Taku Ekanayake is a 28-year-old Sydneysider, who recently made headlines for his winning home purchasing strategy that’s enabled him to accumulate six properties; with more on the way. Locked out of the Sydney market, Ekanayake researched consistently performing cities across Australia and made cost-effective purchases right around the country that generate a passive income from renters and grow his portfolio slowly, but surely. Assoc. Prof. Dimovski says that it’s this kind of savviness young people everywhere can learn from. ‘Doing your research and staying one step ahead of the real estate agents is how to give the boomers a real run for their money,’ he concludes.
Originally published on this.