Over the last week we have asked the PW community how much social pressure they feel about the need to get into the property market. The results* varied – roughly 50% felt the pressure to buy asap, 38% sort of felt the pressure and the remaining 12% felt no pressure at all.
We think it would be fair to say that the majority of our Gen Y community feel at least somewhat stressed or pressured to meet the housing status quo.
But why? And what is it about our friends and peers that don’t feel that pressure. How do they approach the barrage of media articles, social updates from friends and comments from family or colleagues. Why do they ignore all the noise?
There were many reasons given for why a property purchase was or was not a primary focus. Let’s dissect some.
I don’t feel the pressure because I’ll happily wait for a 20% deposit
We think this is a completely reasonable stance. Many people want to get into the property market, mostly due to pressure, at whatever cost. Often this means saving only a 10% deposit, which comes with other cost and cash flow considerations. Although saving a 20% deposit might mean you delay your purchase, it can certainly benefit you in other ways.
Interest money & rent money – they’re both ‘dead money’
Often people rely on the argument that purchasing a property is a better outcome as ‘rent money is dead money’. But is it? One member noted that paying rent enables them to live in an area they love but could not afford to buy in. The sentiment above refers to the fact that you are paying out interest in the hope that you will be rewarded with growth in your property value. The media would have you believe that this is guaranteed, however history would tell you this isn’t the case. Either way, we agree that rent money is not dead money if it enables you to achieve other lifestyles or investment goals.
It’s an #unattainabledream so why get stressed?
This is a practical view and we love the realism, however we also encourage daring to dream! If this is your current feels, we definitely recommend you chat to an adviser about making that dream a reality.
The freedom of less binding investments is important to me
Property is generally considered a long term investment. Yet Gen Ys are typically known for being…frivolous and short-term focused (hell yeah!). You can’t sell a portion of your house to fund your two years work overseas, but you could do that with an investment portfolio. If flexibility is important to you, then this is certainly an approach to consider.
I wanted to get in control and have some certainty for my family
A motivation for buying a property is often certainty and security. This is 100% okay and if this is one of your main goals – then go for it. Try to ignore the noise and focus on what you and your family need and importantly can afford.
I don’t want to overcommit to something I can’t afford
If this is your thinking, go you Glen Coco! Everyone’s financial means and loan serviceability are different. Any pressure you feel to ‘get into the market’ should not override that. Nutting out your current expenses and how this will change once you have a loan is a very important step in considering a purchase.
At the end of the day, do what’s best for you. As rentvesting becomes the norm and Australian home ownership is more similar to our European counterparts, the pressure will hopefully dissipate. Until then, keep focused on your goals and if anyone tries to distract you, distract them back with a funny cat video.
*Based on member meetings, discussions with colleagues & friends and our Facebook poll. By no means scientific!