Millennials become Australia’s most active property investors

Jarrod
By Jarrod
4 Min Read

Millennials have been crowned the country’s most active property investors as many attempt to climb the property ladder before it’s too late.

According to new data from Commbank, 46 per cent of new property investors in 2023 were made up of millennials (born 1981 – 1996), followed by Gen X (born 1965 – 1980) who accounted for 37 per cent of all new investment property purchases throughout the calendar year.

Nationally, the average age of property investors was 43 years, and the average loan size was just over $500,000.

Commenting on the data, Commonwealth Bank’s Executive General Manager of Home Buying, Dr Michael Baumann, said it was interesting to see a significant proportion of millennial property investors opting to purchase property alone.

“From our data, we can see that almost one third of all millennial property investors actually purchased their investment property on their own,” he said.

Over the past year, data from the Australian Bureau of Statistics found investors were the key driver of new lending, with lending growth to this segment reaching 18.5 per cent.

Meanwhile, lending to first home buyers rose by 13.2 per cent, while owner-occupiers saw a 3.4 per cent increase in lending.

Supplied: Commbank

Nationally, the top postcodes for new property investment purchases in 2023 were in Sydney’s North West and CBD, followed closely by Melbourne’s northern suburbs.

Dr Baumann said the majority of the top-performing postcodes had remained “consistently popular” amongst investors for many years, with the three top spots remaining unchanged since 2019.

A new way of investing

However, while the city suburbs remain a haven for traditional cash-rich investors, Commbank’s findings show that this latest boom in millennial buyers has seen a shift in how Aussies are approaching the investor market during the cost-of-living-crisis.

According to Dr Baumann, many millennials have bucked the buying-to-live-in trend, instead choosing to “rentvest”.

“Interestingly, what we continue to see from many Aussies is the inclination to ‘rentvest’, buying property where they can afford and then renting where they wish to live,” he said.

“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.”

Dr Baumann also said the generational shift had seen the rise of other alternative loan products offered to investors, like CBA’s ‘Property Share’, which allows buyers to split the cost of buying a home with family and friends while retaining individual control of their finances.

“With growing challenges around housing affordability and cost of living, Property Share may be appealing to customers who are looking for new ways to be able to afford a property given the current conditions,” Dr Baumann said.

“In addition to our flexible suite of products and product features, Property Share is another way we are helping customers, by enabling them to split the cost of buying a house with friends or family while keeping their finances, ownership and repayments separate.”

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Jarrod
By Jarrod
Jarrod Brown combines his background in journalism, copywriting and digital marketing with a lifelong passion for storytelling. He has a strong passion for new and emerging consumer technology within the building sector. He lives on the Sunshine Coast - usually found glued to the deck of a surfboard.