By Karina Stathis for Daily Mail Australia
13:26 13 July 2024, Updated 13:36 13 July 2024
Young Australians losing hope in the future Climbing the property ladder Just attending a few auctions reveals exactly who is responsible for the high prices.
If you’ve been to a house or apartment auction recently, it’s clear who’s raising the bids far beyond what any millennial or Gen Z could afford.
No, it’s not about newcomers or foreign investors who got their cash.
The worst offenders aren’t even the so-called “mom and dad landlords” who spend their savings and pensions on properties to rent out.
Instead, it is “investors looking for smaller homes” who are driving up prices for small homes and units that were previously considered starter properties for young Australians.
This is often overlooked in discussions of the housing crisis, as Australian retirees with adult children who have moved out are selling their family homes and downsizing.
My partner and I are looking to buy a house – and with every open house, my palms are sweaty with excitement and my cheeks are hot with anticipation.
That is, until I looked around and saw who my competition was, and those feelings quickly turned into a cold sense of doom.
There was simply no way to outdo retirees who had money lined their pockets from selling their old homes, which they had bought when prices were a fraction of what they would be able to sell for decades later.
Real estate agent and self-made millionaire Adam Flynn said the situation was a national issue and the government should create more incentives for first-time buyers only.
The 43-year-old man, from MelbourneHe told the newspaper Femmel that younger generations have little chance of outperforming older people who received cash – except for those who get financial help from their parents.
“This situation is not limited to a specific geographic location, it is spread throughout Australia,” Flynn said.
“As people get older, their lives become confined to certain suburbs. Their doctors, their stores, their dentists, their family and their friends are all in one area. So they don’t want to move from where they’re used to.”
Mr Flynn also pointed out that people are living longer and want to remain independent rather than go to a retirement village, so downsizing is the best solution for them.
“What we found is that older generations are looking to sell their big four-bedroom homes because the kids have moved out, the property is too big, and the maintenance is more than they can afford,” he said.
“So they buy a smaller two-bedroom house but stay in the same suburbs.
“For first-time homebuyers, it’s really hard to compete with people who are looking to downsize. That’s why a lot of young people go to inspections and auctions with their parents.”
Mr. Flynn warned that if millennials and Gen Z want to be competitive, they need to rely on the support of mom and dad because otherwise they won’t have the budget to operate.
Comment on TikTok Virus video Many people have shared their own experiences on the issue, with many saying they would have to wait for an inheritance before they could buy a home.
“It sounds bleak and cruel, but I’m looking forward to the moment my parents die. I’m going to use their money directly to buy the house I want,” one wrote. Expressing taboos is something a growing number of young Australians are quietly feeling..
Another agreed, saying: “I feel exactly the same way – the only way I see myself owning my own home is either my mum’s current house, or selling it and using the money to buy a new one.”
Others said they also saw baby boomers rushing to buy properties without the need for loans.
“I feel for you, we had the same thing a few years ago in Sydney – the baby boomers were doing the first show and paying $200,000 to $400,000 on [the] “Price guide, hits us all in one offer,” said another.
“We had the same experience buying in Brisbane. There were hundreds of people at inspections (mostly baby boomers) and we had to compete with cash offers until we decided to look at two-storey homes instead,” one user wrote.
What’s the solution?
Mr Flynn suggested there should be government-led developments specifically for first-time buyers, with eligibility criteria tied to contracts.
They will be the opposite of a retirement home – a complex geared towards younger new buyers.
Meanwhile, he shared his advice for young Australians currently looking to buy their first home.
“We need to be open to different types of properties and seller circumstances, such as people looking to sell urgently due to divorce or death,” he added.
‘Make multiple offers on different properties, giving up some features while maintaining the basic requirements.’
Adam also suggests looking at properties that need renovation or updating, as they may be less attractive to baby boomers who want move-in-ready homes.
Focusing on urban areas is better for long-term capital growth than regional locations, even if it means over-expanding within allowable limits.
“Also use a different investment strategy – for example, pay the minimum possible deposit, take interest-only payments and use the money saved to invest in additional properties over time,” Adam said.
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