A majority of Gen Y's would prefer to buy an investment property rather than an owner occupied dwelling, new research has found.
According to Loan Market Group, first home buyers are starting to filter back into the market, with the brokerage enjoying a 5 per cent rise in enquiries from this buyer segment.
“Among all of our enquiries from first home buyers there has been a 15 per cent rise in the number of them looking to purchase an investment property,” Loan Market Group chief operating officer Dean Rushton said.
“Many of these buyers are trying to take advantage of the high rental yields around the country and get into the market with an investment property.”
Mr Rushton said Generation Y – those born after 1981 – made up a large number of the first home buyer enquiry.
“Gen Y is still chasing the great Australian dream of home ownership but many are approaching their entry to the market from a different angle,” he said.
“An investment property also gives them the option to buy property where they can join forces with a family member or friend to purchase.
“If they can muster a healthy deposit and take advantage of some of the interest rate specials on offer from lenders they could well be positively geared on the investment.”
Mr Rushton said official interest rates staying on hold at 4.75 per cent since November last year had also resulted in an increase in enquiries from first time buyers.
“We have gone nine months without an interest rate rise by the Reserve Bank of Australia and this has not only given a much needed reprieve to households dealing with increased living costs but has encouraged first time buyers,” he said.
“The prospect of the RBA lowering rates in response to the latest global economic downturn could boost consumer confidence and increase activity in the home finance sector.”
Finance Made Easy's Tony Bice said the research was not suprising given that a majoirty of his business prospects are investors.
"I'm seeing a lot more investment enquiries. Savvy borrowers understand what is happening in the global markets, they are comfortable with their own finances and employment and as such, they believe now is a good opportunity to get into the market," Mr Bice told The Adviser.