Myth-busting the ‘mum and dad’ investor cliche
New research has revealed that single Millennials – not Baby Boomers – are the largest cohort of active Australian investors.
When you imagine a typical property investor, the image of a middle-aged suburban couple may spring to mind. It’s an archetype which is reinforced and recirculated through language that speaks about “mum and dad” investors or even “the bank of mum and dad”.
But according to new research from CommBank, this stereotype may be unfounded.
An analysis of new investment property purchases in 2023 found almost half (46 per cent) of all new purchases were from Millennials, or those born between 1981 and 1996.
Gen X (born from 1965 to 1980) was the second largest cohort for new investment property purchases, comprising 37 per cent of all buyers.
For those used to thinking of Millennials as avocado toast-munching students, this information may come as a surprise. But times are changing, and the average Millennial is now in their 30s and in the prime of their professional years.
Nationally, CommBank found that the average age for property investors is now 43, while the average loan size is a whisker over $500,000.
The bank’s executive general manager for home buying, Michael Baumann, was particularly struck by the number of young investors who were prepared to take the plunge alone rather than splitting costs with a partner or family member.
“From our data, we can see that almost one-third of all Millennial property investors actually purchased their investment property on their own,” said Baumann.
Another trend that CommBank uncovered in their report was the growing popularity of “rentvesting”, where Australians purchase property in less desirable but more affordable areas, while continuing to rent in their preferred neighbourhood.
Baumann explained: “Rentvesting gives Australians the chance to get their foot on the property ladder sooner rather than later and purchase a property in a lower cost area without having to give up the lifestyle they have become accustomed to when renting.”
This trend was reflected in the top locations targeted by property investors, which tended to be outer-ring suburbs rather than inner-city hotspots.
In Sydney, northwest suburbs like Kellyville and Marsden Park proved popular, while Melbourne saw western suburbs like Hoppers Crossing come out on top.
Haymarket, Wyndham, Blacktown, Hume, the Hills, central Brisbane, Casey, central Melbourne and Liverpool rounded out the list of top postcodes for new investment purchases in 2023, reflecting a consistent preference for affordable pockets of the east coast capitals.
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