When it comes to financial matters like finding the right loan, Millennials tend to be the whipping boys of the media, being labelled with many unfair stereotypes. We, on the other hand, think that Millennials are actually ideally suited to purchasing property for a number of reasons. Here’s why.
1. They’re already thinking about retirement
Generation Y came of age at a time when Australian households have had debt increasingly weighing on their minds. According to the Australian Debt Clock, housing debt in particular has skyrocketed since the early 1990s, though credit card and personal debt has also risen.
It’s no wonder, then, that Millennials are thinking about getting through financially later in life. The 2015 Future Leaders Index recorded nearly 80 per cent of Millennials being concerned about having enough for retirement. At the same time, how are they thinking about making up for this? Research by ING Direct found that they expected property investment to account for 13.2 per cent of their nest egg. See? It’s practically meant to be!
2. They’re young
Though everyone has a slightly different definition, most people agree that Generation Y encompasses those who were born anywhere between the early 1980s and late 90s. If we take 1980 and 2000 as our bands, that means the median age of a Millennial is 25. This gives Millennials what’s perhaps their greatest advantage – their youth.
Last year, the Sixth Annual Bankwest First Time Buyer Deposit report estimated it takes the average first home buyer 4.1 years to save for a house deposit. To those getting on in years, this might seem daunting. But Millennials have time on their side – if they start saving now, they may even own their first home before they turn 30.
3. They’re financially smart
Despite the bad press that Generation Y gets, when it comes down to their finances, they’re not so different than their grandparents. The Future Leaders Index tells us that 80 and 65 per cent of them have short- and long-term goals, respectively, and 93 per cent have money saved – an average of $8,271. That’s part of the way toward a deposit.
This backs up the findings of the 2015 Northwestern Mutual Planning and Progress Study conducted in the US. There, they found Millennials tend to be risk-averse, realistic and ultimately conservative when it comes to their finances.