First home buyer landlords a market force

First home buyer landlords a market force

New property data shows more than one in three first home buyers are entering the market as landlords rather than owner-occupiers.

Fairfax Media reported data from consultancy Digital Finance Analytics found investors made up 35 percent of the first home buyer market sector, up from an undetectable survey segment just three years ago.

Firstmac Managing Director, Mr Kim Cannon, attributes the rise to astronomical property prices in inner city Sydney and Melbourne.

“It’s no surprise that people want to live close to where they work and play,” Mr Cannon said.

“It would be a rare person who actually enjoys an extended commute from the outer suburbs, but inner city property prices are prohibitive to a lot of first home buyers.”

Mr Cannon said many first home buyers were opting to buy an investment property to build wealth, but continued to rent in the inner city.

“It’s a seller’s market in the Sydney and Melbourne hotspots, so it’s more common to see urban devotees contenting themselves with renting for longer and building wealth in other areas.”

Traditionally, a first home served as a market entry point that provided equity to purchase a bigger home later.
“This situation is no different,” Mr Cannon said.

“These first home buyers are still using that initial property as a stepping stone to build wealth and pave the way for a future purchase of a bigger home or one closer to the urban centre, they just don’t live in it.

“They are still buying that ‘first rung on the ladder’ property, which is located where their budget permits, but they are continuing to rent in the areas where they prefer to live.”

Image credit: Scott Lewis

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