Millennials have become the new landlord generation

Gone are the days of millennials favouring avocado toast, with research revealing younger Australians are investing in property at higher rates than their boomer parents.

Joinery manager and property investor Anthony Weiley with wife Sam and daughters Ella, 10, and Halle, 6, at their home in Sydney. Picture: Jane Dempster

Gone are the days of millennials opting for avocado toast over homeownership, with new research revealing younger Australians are investing in residential property at higher rates than their baby boomer parents.

Millennials and Gen Z made up more than half (53 per cent) of all new property investment purchases last year, according to Commonwealth Bank data, taking advantage of rising property prices and strong rental yields.

The typical property investor is now 43 years old and looking to spend just over $500,000 and, interestingly, a significant proportion of millennial property investors are choosing to buy property alone.

“We can see almost one-third of all millennial property investors actually purchased their investment property on their own,” Commonwealth Bank executive general manager of home buying Michael Baumann said.

On the flip side, Gen X represented little more than a third of the market, while Baby Boomers were only 10 per cent of the investment buyer pool last year.

Joinery manager Anthony Weiley, 38, is in the midst of settling on an investment property in Brisbane, a far cry from his home in western Sydney. Hoping to capitalise on the 2032 Olympic Games, he has used residential property for the past 10 years to set up the financial future of his young family.

“Property is what I feel safest investing in and we’ve never seen a backwards step in it,” Mr Weiley said. “I live pretty comfortably for someone that doesn’t make the mega bucks, it’s not like were making huge money. Really, anyone could do it if you have a go.”

Investors are increasingly getting back into the market. Buying levels were up 21 per cent in February compared to the year prior and are at the highest levels since mid-2022, according to the Australian Bureau of Statistics data.

Sydney-based mortgage broker Luke Camilleri believes young investors are savvy, well-researched, and willing to take a punt on properties around the country.

“Because there’s so much more information, new investors are coming to us with more knowledge because it’s just so easy to ­access these days,” said Mr Camilleri, owner of Mortgage Choice Parramatta.

The ABS lending figures show Western Australia, South Australia and Queensland are hot beds of activity, which PropTrack senior economist Eleanor Creagh said is interesting as their respective capital cities have some of the tightest rental vacancy rates.

“Strong growth in rents and increasing property prices are likely the drivers that have attracted investors to return to the market, alongside the stable interest rate environment and all those other drivers of population growth, and strong labour market conditions,” Ms Creagh said.

While investors are currently overrepresented at open homes around the country, she said their participation was very low from 2017 through to the end of the pandemic boom, which is even` today contributing to the current rental crisis.

“It’s a bit of a double edged sword,” she said. “Anecdotally, investors and first homeowners compete for some properties. But when you look at conditions in the rental market at the moment, they’re incredibly tight, and we’ve clearly got rental supply constraints. Without investor activity, that would only get worse.”

Dr Baumann said more millennials seemed to be choosing to rent where they want to live and buy where they can afford, to get a foothold in the market.