Gen Z buyers sacrifice lifestyle to enter brutal housing market

Young Australians are finding new ways to enter the housing market amid rising property prices.

Gen Z sisters Hollie and Sam are among a growing number of young people finding unconventional ways to enter the property market and choosing to buy properties together.

“Obviously it’s a lot easier with two incomes,” Hollie said.

“We were both in a similar position and ready to start looking, we had some savings behind us so we thought why not make this process a little easier.”

Hollie said she knows of friends who have bought homes with their siblings or friends to offset high house prices.

“There are very few people who do this on their own and it has been a struggle, so working with other people can alleviate that,” Hollie said.

The sisters told NewsWire they were looking for space close to friends and family but also where they could enjoy the beach lifestyle, which they purchased in Bentleigh, south-east of Melbourne.

This comes as housing prices continue to rise.

In October, REA Group data showed national prices rose 7.5 per cent over the last 12 months, adding $65,200 to the average house price.

The average home will now set buyers back $858,000, a 51 percent increase from five years ago.

Before purchasing the property together, the sisters temporarily sacrificed their lifestyles to save money.

“We had both been saving for years and really gave up in the last 12 months before we bought,” Hollie said.

“I actually moved back home to save more money and also made general lifestyle changes like going out less, going for runs with friends, and drinking coffee instead of dinner and drinks.”

Hollie says the temporary disruptions were “worth it” as the sisters can now return to their normal lifestyles while owning a home.

The sisters are not alone; Westpac data shows that despite high house prices, more than one in three young Australians are planning to buy their first home.

80 percent say they are willing to buy in areas they had not previously considered and sacrifice their lifestyle in the short term to crack the real estate market.

Westpac chief executive mortgage James Hutton says Generation Z is moving into the housing market despite high barriers.

“They remain flexible in their plans, taking into account the support available and are signaling they will not remain tenants indefinitely,” Mr Hutton said.

“This rise is important for supply and affordability conversations in Australia in the coming years.”

Westpac also points out that the Albanian government’s 5 per cent deposit scheme is popular with young Australians.

The extension of the scheme gives all first home buyers the opportunity to purchase with a 5 per cent deposit. The number of places cap has been removed across all streams, income limits have been removed and the property cap price has been increased.

“Demand from younger buyers is rising and the extended government guarantee is likely to accelerate purchasing decisions,” Westpac senior economist Matthew Hassan said.

He said affordability and supply remain major challenges for buyers.

“The scarcity of listings is forcing many people to expand their searches to new areas and property types,” Mr. Hassan said.

“Addressing the deep-rooted supply shortage is a priority for governments, but material improvement will take time.”