An increasing number of homebuyers under the age of 30 are taking a strategic approach to real estate by purchasing investment properties as their first move. Although the federal government has expanded schemes to help first-home buyers live in the properties they purchase, a different trend is emerging - buying to lease, not to live.
Young buyers are drawn to the idea that income from rent can help with mortgage repayments. This makes the investment-first strategy more attractive. Loan amounts and monthly repayments are rising, and “rentvesting” is becoming a common solution. This involves buying a property in a more affordable area and renting in a preferred location. Lower upfront costs, combined with strategies such as remaining at home after a purchase, have enabled many to diversify their property journey early.
Lending data shows a rise in investment loans among those under 30. One bank reported that loans to this group doubled in a single year, while another saw a 24% increase. These early investors often do not have large deposits. Instead, they rely on government deposit support, rental income or help from family to make purchasing possible.
Updates to the Home Guarantee Scheme have made it easier to buy with a 5% deposit, as recent rule changes have removed income and location restrictions. Although this could help more people buy homes to live in, there is concern that increased demand might drive prices up, making early investment a more appealing route.
Industry research indicates this is more than just a niche development. Around 6% of first-home buyers are now becoming landlords right from the start. Many younger people see property as a tool for building long-term wealth. Surveys show that 36% of Generation Z and 32% of Millennials plan to buy an investment property within three years, compared with only 11% of Baby Boomers.
This strategy does come with drawbacks. For example, properties not used as the main home can be subject to capital gains tax when sold. However, many who adopt the investment-first model believe the opportunity to build equity now is worth the potential tax implications. Some even treat property buying as a joint effort with parents, who co-invest to help younger family members enter the market.
This trend highlights a shift in thinking. In an environment of rising house prices, stagnant wages and more flexible lifestyles, young Australians are redefining how they get onto the property ladder.
