Young investors are ditching home-ownership dream for lifestyle choice

Young investors are ditching the dream of home ownership, opting instead for other measures of financial independence.

According to the new FPA survey, 57 per cent of respondents say having a lifestyle of their own choice is a top priority against just 41 per cent who rank owning a home as the key aspect of fulfilling financial dreams. Picture: Peter Ristevski

Younger investors are gradually giving up on the Australian dream of home ownership, favouring instead new measures of financial independence, says a survey to be released next week by the Financial Planning Association of Australia.

With no hard evidence of an expected sharp slowdown in house prices and valuations now exceeding the reach of many young people, the report, which surveyed 2,600 investors, found “living the dream” for Australians now means having a lifestyle of their choice underpinned by financial independence.

Dante De Gori, the chief executive of the FPA who commissioned the “Live the Dream” report, says: “There is a sense among many people that this traditional notion of owning your own house is just not attainable any more — especially in Sydney and Melbourne. But what we found is that a new generation also say that owning a house is not everything — they are much more willing to plan their finances and crucially to start early when investing.”

According to the survey, 57 per cent of respondents say having a lifestyle of their own choice is a top priority against just 41 per cent who rank owning a home as the key aspect of fulfilling financial dreams. The FPA carried out the survey as part of a wider attempt by financial planning professionals to display the value of financial advice to the wider community.

As De Gori explains: “We are finding that it is not all about housing or indeed all about superannuation — rather there is a growing sense among Australians that financial advice is actually an enabler. It can enable you to do whatever you might really want to do in the future — it might be getting married, it might be paying for a wedding for someone in your family.”

With the financial planning industry still recovering from a string of scandals based largely on the major banks’ selling of advice products, most financial planners in Australia have actually recorded a very strong year, as interest in the area spiked after the government introduced its new super rules regime on July 1.

Earlier this week it was reported the average value of superannuation contributions among Australian DIY funds tripled from $9,138 to $32,055 in the three months to June as investors rushed to take advantage of the last days of a more generous superannuation contributions scheme.

But there is some evidence in the FPA report that the preoccupation with retirement rules may now fade as the rules become ingrained in the wider financial system — the “Live The Dream” report finds that ‘‘setting myself up financially for retirement’’ ranks a lowly ninth in the priorities of investors in the survey.

More generally, the report also paints a more colourful picture of successful investors than the hackneyed image of cardiganed DIY retirees measuring dividend streams. A section of the report which concentrates on an estimated one in four investors who believe they are already achieving their material dreams through financial planning says this cohort is “five times more likely to meditate or engage in spiritual activity”.

“We see successful investors as a group that show strong habits and it does include traditional family-orientated pursuits such as spending quality time with their kids. It often includes mediation and of course the ability not just to plan but to stick with the plan — the survey shows our most successful investors are five times more likely to show that ability than the average Australian,” says De Gori.

Not surprisingly, NSW is the hardest place to plan for accumulating wealth. Almost half of the residents found planning their life investments ‘‘hard to very hard’’ compared to just 36 per cent in Western Australia, where residential property prices have been softer over the past two years.