The rise of the ‘rentvestor’
2015-07-20The ‘rentvestor’ trend has been identified in a new white paper on young people and the property market.
The report, by LJ Hooker estate agents, identifies five new trends for under 30s in the property market. Top of the list is the ‘rentvestor’.
“This buyer is currently renting and loves their lifestyle and doesn’t want to relocate from the area where they are presently living,” the report says.
“The problem is that they can’t afford to buy in this area. Rather than disrupt their current lifestyle these buyers purchase a property in a more affordable part of the city or country, and rent that property out while they remain as tenants in their current location.”
“They are weighing up affordability with lifestyle choices. Lifestyle is winning out, but they still want to get into the property market,” he says.
“They want to live where they can enjoy the bars and restaurants, where their friends are.”
Tiller says underlying this is the rising cost of housing, particularly in inner-city locations where a large portion of Gen Y want to live.
“The biggest driver changing buying habits of those under 30 has been the rising cost of property. The national average loan size for a first time buyer was $326,000 as of March 2015; a growth of 14 per cent over the past 5 years and 58 per cent since 2005,” Tiller says.
“Price growth has also dramatically slowed the time it takes to save up for a deposit.”
Tiller says for many ‘rentvestors’ the renting is part of a broader investment strategy, and they look to purchase a property that gives them a strong return often with the potential for them to move into at a later stage.
“If they’re looking outside of capital cities then they tend to go for houses or townhouses. Otherwise a unit within a capital city can hit their budget and investment strategy,” Tiller says.
“They may be looking to move to the area as they get older or it may simply be an investment.”
Source : http://www.realestate.com.au/blog/the-rise-of-the-rentvestor/
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