Sydney real estate: Family priced out of market turn to investing

Part of a growing group, this Sydney family has watched as property prices soar out of their reach. They are now looking elsewhere to grow their wealth.

Sydneysider Daniel Child has been saving for a house deposit with his wife for five years, but he’s wondering if they should stop working crazy hours and put their money elsewhere.

The couple, who have an 18-month-old daughter and another baby due in September, were hoping to buy in the next two years to give their children a forever home.

The 37-year-old works in the legal team for a data analytics business, while his wife specialises in learning and recruitment – and both are “frustrated” by skyrocketing Sydney house prices.

“My wife and I both feel like we have pretty decent salaries and we have been in the workforce, me for 13 or 14 years and my wife around 10 years, and we are getting to this stage in our lives where we would have expected to be able to afford a place where we want to live,” he told news.com.au.

“We do recognise lots of people rent, but since having children, having a house becomes more important.

“We want to have the space for them to play in the garden and set up in a way that works for them and it’s become more apparent how valuable that is in the last 18 months. Certainly, it’s a frustration that it’s not easy to get our foot on the ladder.”

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Sydneysider Daniel Child, 37, is among a growing number of young people priced out of the property market and now turning to shares to get by. Picture: Supplied

Stock market investment doubles in two years

Two years ago, Mr Child invested $10,000 in the share market and his money has already doubled to $20,000 via the platform Goodments by Dough.

He said given the current financial climate, it makes a lot more sense with low interest rates and the fact savings accounts aren’t giving “great returns”.

“I think my savings account is currently on 0.5 per cent per annum so I’m seeing interest of like last month it was $15, so it’s an absolutely massive difference,” he said.

It’s made Mr Child consider giving up on the property dream to grow their wealth elsewhere.

“The barriers to buying a property have certainly made us think about other options and other ways of approaching things, rather than traditional going from renting to buying,” he said. “We are thinking about other places we might like to live or other ways we may achieve more time with family as opposed to working all those hours and still not being able to afford a property.

“We’re not absolutely dead set that we have to get a property and it’s made us think about other ways to approach things like investments and where to put our savings as part of that.”

Mr Child likes the focus on ethical choices in the Goodments app, but warned there is still risk involved in investing.

“You should be informed that things can be outside of your control and you can lose a great amount of money or all your money, which wouldn’t happen with a savings account,” he said. “But if you have a longer-term view on what your money is doing, the younger generations in particular, if we’re talking about cities like Sydney and Melbourne where the route into the housing market is difficult and where you traditionally invest in brick and mortars to grow wealth, they should explore investing – but be well-informed about the potential downside as well as upside.”

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Two years ago Mr Child invested $10,000 in the share market and his money has already doubled to $20,000. Picture: Supplied

Younger investors abandon property market

According to the latest ASX Australian Investor Study, just like Mr Child close to a quarter of all investors started investing in the past two years, but many were aged 25 or younger. Women are now making up nearly half of all new investors, the study also found.

Douugh founder and CEO Andy Taylor said millennials and Gen Zs are gravitating in record numbers to the share market to help them grow their savings and build wealth.

“Young people realise buying property is no longer an option, so they are turning to shares to make their money work harder and secure their futures plan,” he said.

CoreLogic data comparing national dwelling values and average incomes found low income workers are only able to afford 17.6 per cent of available housing stock in Australia – or just 3 per cent in Sydney and 4 per cent in Melbourne.

Teen gets started early in stock market

On the Gen Z side of things there is NSW teen Aaron Marcellino. The 17-year-old is only in year 12, yet under the guidance of his dad Dave is already trying to get ahead through the stock market, and aims to use shares to help him buy property in his early twenties.

He’s invested $2000 into the share market so far.

“I think it’s something everyone should be thinking about and it’s a good time to start around 16 or 17 when you get your first job, so you can invest money so you have some sort of future,” he said.

Aaron Marcellino, 17, is already investing in the stock market, with help from his dad. Pictured: Supplied

The savvy teen has invested some of the money into a simple dividend stock for the long term, while the rest was to buy up shares at National Australia Bank.

“Probably I’m going to hold onto the bank investment, but the other one I’m trying to make more money for a property,” he said. “It would be good to have as another investment and that would make more money moving forward again.”

While he thinks everyone his age should start investing, he admits he has never had a serious conversation with his friends about the topic.

But he is already thinking that he will be set up for retirement by “playing” the investment game long-term.