Not all generations share the same enthusiasm and views about issues, concepts and ways of life. Therefore, when it comes to real estate and the prospect of buying property, rather than renting, there is a difference of opinion between generations. Many older generations feel that buying property is the only way to go, as it offers stability and security later on in life. While younger generations, prefer less financial commitment so that they can spend their hard-earned cash when and where they like without any restrictions.
In order to understand how generations feel about property buying pressures, let’s compare the attitudes of Baby Boomers, born between 1946 to 1961 and Generation-Y, also known as Gen-Y, born between 1981 and 1995.
Baby Boomers Defined
Baby Boomers, born after World War II, are viewed as being the most wealthiest, active and influenced by social change. Many Boomers, who held shares and other financial assets, were affected by the Global Financial Crisis and it is estimated that some 60 percent lost some investment value. This has seen many boomers delay retirement.
Baby Boomers and Real Estate
Boomers that own real estate believe that this was the best form of investment that they made, as it has grown in capital value, offered them stability and has allowed many to still retire, despite other financial set-backs.
At present, Baby boomers are typically looking to retire and for many this means selling larger, family homes and downsizing. The sale of their family home, in most instances, is enough for many Baby Boomers to fund their retirement. In this respect, property for Baby Boomers has given them security, reassurance and has been a lucrative way to fund their retirement.
This generation has embraced the great “Australian Dream” of property ownership and has seen it as a way of putting their money to good use, especially in an investment sense. However, this sentiment is not felt by Gen-Y.
Gen-Y are classified as being lazy and demanding. Many cannot see the value in buying property, and they do not wish to be tied-down with large financial commitments. Instead, they seek to travel.
Gen-Y and Real Estate
Gen-Y are not seeking to buy homes. The majority prefer to rent. They like the flexibility of being able to move when and where they want without the hassle of selling a home and they like being able to spend money on holidays and other luxuries without worrying about hefty financial commitments. This has seen them gain the title of “Generation Rent”.
However, many have shown interest in investing, rather than buying a home of their own. This way they avoid accumulating too much debt, but are still building their wealth.
In a recent report on housing affordability carried out by realestate.com.au, it was found that some 70 percent of Gen-Yers were interested in co-purchasing a property with family, friends and even parents, as a way of reducing their financial commitment and breaking into the property market.
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Written by eChoice