Gen X winning investment race: 40% report owning at least 1 investment property

The analysis found that Gen X grabbed the title and would reap the benefits of property investment and enjoy retirement more than the remaining generations.

The data showed that more than 70 per cent of Gen X currently live in an owner-occupied home, and nearly 40 per cent own at least one investment property.

Gen X are currently aged between 45 and 59 years, and represent 18 per cent of Australia’s total population.

Propertyology’s head of research, Simon Pressley, said Gen X will be the next generation to exit the workforce and the first one to really enjoy their retirement.

“Many Gen Xers already have significant equity in real estate and are now best placed to deploy that equity,” Pressley said.

“As the ‘nest’ at home progressively empties, higher disposable income will provide Gen X households with the greater financial capacity to leverage into a bigger asset base.”

The analysis attributed Gen X’s success to their ability to be goal-oriented, independent, self-motivated and disciplined, as many grew up without relying on their parents for financial support.

“The kids from the era of Countdown and Atari video games grew up with compulsory household chores and juggling high school with a casual job,” Pressley said.

“The early stage of their working life (1985–1995) was Australia’s worst economic conditions in 60 years, significant corporate and banking collapses.”

In comparison, while 80 per cent of Baby Boomers own their homes, only 3 out of 10 households have achieved financial independence.

Propertyology’s analysis showed that the remaining seven households depended on the yearly $70 billion paid by taxpayers to fund aged pensions to make ends meet.

Baby boomers, aged 59 to 77, now account for 5 million Australians, with the government forecasting the number to rise to 5.5 million by 2043.

“If ever there was a compelling statistic to highlight the importance of all governments encouraging households to invest in their own future, as opposed to depending on aged pensions, it is this 5.5 million statistic,” Pressley said.

However, Baby Boomers faced financial adversity in achieving ownership as they had to make a 30 per cent deposit, and interest rates were often 10 per cent.

While Baby Boomers struggled, they ensured their children in the Millennial generation would not.

The analysis showed that Boomers’ efforts to ensure their children never went without created a generation with higher retail consumption and greater lifestyle indulgence.

This was accelerated by the introduction of Sunday trading and the rise of online shopping.

“History leaves footprints. It explains why a high portion of Millennials grew up living-in-the-now with overseas travel, car upgrades, dining out, new outfits,” Pressley said.

“Consequently, home ownership and having a family were pushed well back. And financial independence is barely thought of by many Millennial households.”

Data showed that despite being in the workforce for over two decades, approximately 800,000 Millennial households have yet to acquire property ownership.

Millennials are now aged between 29 and 43 years old.

For the portion of Millennials who achieved home ownership, the report makes a strong case that they are the generation that received the best financial advantages of the three.

A typical Millennial household benefits from dual incomes for longer than previous generations and has better access to credit, with home loans available for as little as a 5 per cent deposit and, for some, support from the “bank of mum and dad”.

“Forty-one per cent of Millennial households currently live in an owner-occupied home, growing by approximately 100,000 per year,” Pressley said.

Analysis of ATO and ABS statistics by Propertyology showed that about 700,000 Millennials are already property investors, with 100,000 existing Australian landlords aged 30 or less.

However, the report showed that they are unlikely to retire early.

“With the superannuation guarantee rate, Australian employers will contribute significantly more towards the retirement lifestyles of Millennials than all previous generations. But, by the time they want to exit the workforce, the superannuation access age will be nudging 70,” Pressley said.

While the report noted that each generation has influenced each other, people are not limited by the “era” they live in.

“There are no tangible limitations stopping any individual from achieving whatever they truly set their focus on.”

“Those who sow the most seeds now will rest on the best beaches in 10–20 years’ time,” Pressley concluded.

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