This was emailed to me today, reference included in doc This is exactly what I am promoting to my daughters Interesting trends to emerge in the past few years is the rise of the first time investor. Younger buyers jumped property ownership and went straight to owning an IP. In an expensive market where prices are rising, it makes sense to get in and build some equity. Once you’ve been in the market for a few years, you can use your equity to buy something you actually want to live in. In the past, I think people just moved out to the outer-suburbs for a while. But these days, the outer-suburbs are a lot further out than they used to be. Unless people are willing to accept a long commute, they’re better off becoming investors. And so in recent years we’ve seen a strong emergence of a first time investor class. Digital Finance Analytics In the orange line in the chart below, you can see the strong growth in first time investors. If you add these estimates back to the official first time buyer data (the blue line), you get the yellow line – their estimate of actual first time buying. And what it shows is that there’s no first timer crisis. First time buying is as strong as it’s been in years – at least since the grant induced spike in 2009. Don’t worry about the kids. They’re ok. And where are these kids buying. If they’re not in the market for a suburban block, what are they looking for. Thankfully, DFA have had a look at this question as well. Here are the results: Interesting results here. Almost no first time investors (orange bars) are looking at a house on the outskirts of the city, and very few are looking at suburban houses. The big draw cards for young money are city-edge units and suburban units. CBD units also rate well. This isn’t too surprising. A lot of that will be driven by the cheaper price points that units offer. Still, a lot of inner-city apartments aren’t that cheap in the scheme of things. Not really much cheaper than outer-suburban houses a lot of times. So it looks like there’s a preference at play. I think younger buyers probably “get”, and lower maintenance costs can make units attractive. There’s also probably a fall back play involved. If they fall on tough times, they probably figure they can move into an inner-city apartment if they had to. That’s probably not an option for an outer-suburban house. A lot of this helps explain the popularity of inner-city apartments in recent times. They’re very attractive to young buyers.