I don't need to buy a property because society is telling me to: Gen Y v Baby Boomers

Gen Y are choosing not to follow in the footsteps of their parents and are preferring the flexibility of renting rather than buying a home, says chief executive officer of Wealth Enhancers Finn Kelly.

“A big trend we’ve seen lately is Gen Y starting to question whether they need to buy property right now.

“People are getting a lot smarter; I don’t need a property just because society is telling me to.

“They see the positive effects of Baby Boomers getting great returns but then see Gen Y getting themselves into a large amount of property debt,” says Kelly.

Kelly says Wealth Enhancers recommends young people to invest rather than buy, as they stay emotionally disconnected.

“When you own your own home, you keep putting more and more money into it because you want to keep improving it.

“Gen Y are not willing to give up their state of life, they want to live in a certain place, still have their holidays – they don’t want to sacrifice things. They can’t have the property they ideally want without sacrificing some things,” says Kelly.

Therefore by investing, Gen Y can still live where they want and still have a property without taking on too much dept.

“The biggest thing is people are starting to get a little bit wiser with property and seeing it as another investment, it just happens to be that you can see it and it doesn’t always go up,” says Kelly.

Kelly says Baby Boomers are the opposite and are extremely exposed to property.

“They have large family properties, which are now empty as the children have grown up and left.

“The trend of downsizing takes a lot longer than one would expect though, as individuals feel selling the family home is like losing a part of your identity. They want to do it, but they’re a bit apprehensive,” says Kelly.

Kelly says there are two extremes of downsizers, those wanting to move closer to the city and those who move further out of the suburbs.

“Ones we’re seeing who have done it [downsize] have been happy and quite surprised at how it frees them up.

“It releases equity which can then be put into superannuation,” says Kelly.

Gen Y are classified as those born between 1981 to 1995 and Baby Boomers are classified as those born between 1946 to 1965.

The executive chairman of Aussie, John Symond expects investors will continue to dominate property purchases into 2014.