Avoiding Rent to Save for Home Loan – Gen Y

Australia’s Gen-Y, otherwise called the young Aussies, has broken the mold.

Once typecast as being fixated with carefree spending and sponging off their parents, these Gen-Yers have flown out of its pigeonhole as the currently ongoing high property prices have changed them from being Generation Egocentric into Generation Prudent.

According to a recent survey conducted on mortgage-holders with the age under 30, it reveals that of the thousand respondents surveyed, 71 percent claimed that they never have rented a property.

Young Aussies were found out that they won’t leave home for they want to save for their own property.

Of the 1000 Gen-Yers surveyed, 76 percent of respondents have admitted that they have stayed at home longer than they would have liked in order to circumvent paying rent, for the purpose of saving for a home loan deposit as they hang on to the great Aussie home ownership dream that is buying their own dream house.

More Australian Gen-Yers are opting to stay home longer with parents or some are even staying with their grandparents, in a phenomenon hailed as the “Famwich”, in order to save for a deposit.

With the soaring prices on house and land packages, Australia’s Generation Y has adopted the strategy of extended living in parental homes which is said to have become a common financial strategy among younger people nowadays.

A long-standing trend towards extended living in the parental home before leaving to rent have been increasingly observed as Australia’s Gen Yers are utilizing this to save for their own home instead of renting.

According to the survey findings, the long-standing trend is strongly being observed in Sydney, Perth and Melbourne, of which concerns about housing affordability are most prominent.

Australia’s Gen-Yers Shun Luxury Purchases

On another note, according to a recent survey conducted by McCrindle Research for realestate.com.au, young Aussies are also becoming sensible in their spending as the survey data reveals that 91 percent of respondents are prepared to spend less on discretionary purchases such as brands and luxuries, 76 percent on entertainment and recreation and another 76 percent on car upgrades in order to reach their goal of owning a house.

Furthermore, the survey also said that most of the respondents are willing to give up a swimming pool, extra space or multiple bathrooms. However, three-fourths of the respondents are not willing to forgo modern ‘necessities’ such as health care and private education.

The survey further revealed that overall national confidence about housing affordability was relatively subdued, and ambiguity about the future had resulted to financial conservatism among the youths.

However, despite the disheartening vista of decades of paying mortgage, Australia’s Gen Ys are found out to have the most positive outlook of any age group about being able to buy a home design in the future.

Even David Chalke, a social commentator, said that Gen-Yers are better educated, more connected and informed, are active savers, and smarter than the previous generations.

Likewise, Mr. Chalke also added that young Aussies aged 18 to 31 are now more determined and more focused on their future and are better prepared to work hard and budget.

RAMS has responded to this trend by designing a new home loan product, “Fast Track”, that enables first home buyers to get into the housing market sooner with parental help, while avoiding mortgage insurance.

RAMS chief operating officer Susan Bannigan says it’s hard enough getting children to leave the family nest.

“But when they say they want to stay at home to achieve a serious financial goal, it’s incredibly difficult to say no,” she said.

“For them it’s a win-win situation.”

And of course, money to pay the utility bills and groceries grows on trees.

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