Backdoor way Aussies are affording a home

Plenty of Aussies are discovering a savvy, alternative way to buy a home, despite the cost of living crisis.

A new survey shows 63 per cent of Australian adults own at least one property – either their own home or an investment, underlining the continuing great Australian aspiration to own real estate.

The levels of property ownership between men and women are very similar. The survey shows 64.4 per cent of men and 62.7 per cent of women own property.

Among these owners, 76 per cent of women and 73.7 per cent of men own a house. This likely reflects the prevalence of dual income households and the greater ability of couples to afford a house.

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The Aussie aspiration to own real estate remains alive. Picture by Max Mason-Hubers

The survey also showed that 26.7 per cent of men own an apartment, townhouse or duplex compared to 23.2 per cent of women. This likely reflects the higher rate of investment property ownership among men (14.2 per cent) than women (11.4 per cent). Strata properties are a popular choice for investment because they typically offer superior affordability and rental returns compared to houses.

The survey documents a few relatively new and innovative ways of acquiring property these days.

For example, the rentvesting strategy is equally appealing to men (8.2 per cent) and women (8.5 per cent).

Rentvesting is where you buy an investment property in an area you can afford, while you rent a home (or live with Mum and Dad) elsewhere – typically in a more desirable lifestyle area.

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63 per cent of Aussie adults own at least one property.

Many young people have chosen this pathway into property instead of buying their own homes first.

Another pathway into property is co-ownership.

While it’s common to see couples buying a home or investment property together, a significant proportion of today’s buyers are purchasing investment properties with friends or family members

Among the survey respondents who own an investment property, 45.3 per cent are co-owners rather than sole owners.

Co-ownership is more common among men (48.2 per cent) than women (42.2 per cent), and the majority of joint owners purchased their investment properties with a spouse or partner.

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Co-ownership is becoming more and more common.

But it’s interesting to note that 9.9 per cent of men who co-own an investment property purchased it with a male friend or family member, and 5.5 per cent purchased with a female friend or family member.

Among female investment property co-owners, 7.5 per cent purchased with a female friend or family member and 2.3 per cent purchased with a male friend or family member.

Rentvesting and co-ownership with friends and family are two examples of how the market has adapted to rising affordability challenges over the years.

Leveraging the Bank of Mum and Dad is another increasingly popular means of gaining a foothold in the market.

Buying property has been a simple and winning wealth strategy for generations of Australians.

Residential property is an accessible asset for small investors and easy to understand.

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Residential property is an accessible asset for small investors and easy to understand. Picture by Max Mason-Hubers

And with the ability to leverage a 20 per cent deposit to secure a serious growth asset, it will continue to attract strong investor interest particularly with the younger generations.

And with the capital asset growth in your own home being the last remaining tax-free haven, it is a very attractive option to continue to upgrade your home, if possible.

The demand for quality residential property is increasing each year.

With self-managed super funds, private investors and large investment funds all keen to get set in growth locations, there is no sign of the upward price growth trajectory slowing any time into the future.

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Originally published as Backdoor way Aussies are affording a home