- Three (or more) bedroom suburban home, the preferred choice for millennial first home buyers. Only 7% want a one bedroom apartment
- More than a third (38%) of millennials are saving to buy a home within the next three years
- 61% admit they aren’t sure how much they need to save for a home deposit. This includes 40% of those that are currently saving for a home deposit
- 57% of millennials are cutting back on luxuries like going for dinner in order to save for a home deposit
Wednesday 16 May, 2018: A new report commissioned by ING reveals Australian millennials are living for today but also preparing for tomorrow and serious about homeownership.
According to ING’s new Millennial Homeownership Report, which delves into millennials’ property aspirations, 64% of young Australians (aged between 22-37 years old) prefer to plan ahead rather than live life off the cuff, and more than a third (38%) are currently saving for a house to buy in the next three years.
Despite their aspirations and good intentions to owning a property, 61% of millennials aren’t sure how much they need to save for a home deposit, including 40% of those that are currently saving.
For those that say they think they know how much they need, $76,000 is considered the average deposit amount to purchase their first home.
While the majority of millennials are experiencing positive emotions while chasing their homeownership dreams, nearly one-in-four (23%) do say they feel a level of anxiety when saving for a home deposit.
ING Australia’s Head of Retail Banking, Melanie Evans says: “Our research shows that millennials are living for today, but are also planning for tomorrow.
“Millennials are often unfairly pictured as only living in the here and now, but they want what generations before them wanted; the security and financial stability that owning a home offers.
“Their homeownership aspirations are also rooted in traditional values like opting for a family home, being near green areas and family.
“The challenge is not in wanting a home, but how they go about getting it. While 88% of millennials want to own a home to give them a sense of security about the future – they’re just not sure how much they need to save to get a foot on the property ladder.
“Millennials are thinking about their future. They understand that owning a first home might mean: purchasing in an unestablished area, taking a longer commute or prioritising practicalities over struggling to buy in inner city areas that are perceived to be more urban.
“However it’s evident that they need help on how to go about saving for a deposit with many unaware of how much they need to save.”
Millennials are making sacrifices to achieve their home ownership dreams
While 63% of Gen Y don’t have a current savings plan in place, almost half of those surveyed (46%) believe it is achievable to buy a home but accept that sacrifices need to be made to save the amount required for a deposit.
These sacrifices range from everyday luxuries to major life events. Over half (57%) of millennials are curbing their spending on eating out; a third (33%) are cutting out big ticket items like travel and one in ten are delaying a major life event like a wedding, honeymoon or starting a family to achieve their dream of owning a home.
In addition to accepting sacrifices, millennials are happy to look outside the inner-city urban areas with 60% willing to increase their daily commute time (57% are prepared to increase their commute by up to 60 minutes) or invest in a home in an unestablished areas to get on the property ladder.
Millennials’ property aspirations are rooted in traditional values
The one bedroom apartment isn’t on the first home buyers’ wish list. More than 40% of millennials are likely to purchase a three or more bedroom house as their first property, with just 7% likely to buy a one bedroom apartment.
Millennials are also happy to explore unknown communities if it means making their home ownership dreams come true. Nearly two-thirds (61%) see themselves buying in a relatively unestablished area that’s more affordable.
Melanie Evans believes millennials have the drive and determination to achieve their dream home; they just need guidance when it comes to saving for a deposit.
“Millennials are thinking about their future and understand owning a first home might mean purchasing in an unestablished area, taking a longer commute and looking out for fundamentals rather than ‘cool’ areas. However it’s evident that they need help on how to go about saving for a deposit with many unaware of how much they need to save.”
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Notes to editors:
- This study was conducted by Pollinate in April 2018.The sample comprises 1000 Australians aged between 22-37 years distributed throughout Australia.
- Age, gender and region quotas were applied to the sample.
- Following the completion of interviewing, the data was weighted by age, gender and region to reflect the latest ABS population estimates.
ING changed the way Australians bank 18 years ago by launching the country’s first high interest, fee free online savings account. Since then, we’ve brought continued value to home loans, transactional banking, superannuation and insurance.
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Source: Nielsen Consumer & Media View Sep’17- Feb’18 (n = 11,469) when compared by customers of 15 other banks operating in Australia.