If you’re under 35 and considering buying a home, it might be time to rethink that decision.
The economic environment and world of finance have shifted in recent years, and so should our perspective on homeownership.
But does that mean you should give up on the dream entirely? Not at all!
For generations, owning a home has been seen as a rite of passage for many Australians—a milestone that marks financial success.
However, recent trends show that many first-time buyers are being priced out of the market, especially in sought-after locations.
So, is it time to adjust your strategy?
You can either get frustrated with the current situation or choose to get smart—and wealthy.
Don’t abandon the dream, just take a different path!
Buying a home in your twenties or early thirties often doesn’t make sense. Here’s why:
Many young buyers settle for a home they’re not entirely happy with to “get into the market.”
They end up with a mortgage that ties them down for 30 years, only to find themselves moving out within 7–10 years as life circumstances change.
Why lock up a significant portion of your income in a mortgage if you don’t plan on staying put for 20–30 years?
It’s often emotions and a sense of entitlement that cloud our judgment.
Here’s a better solution: consider rentvesting
Take a longer-term approach and don’t settle!
While you’re young, it’s smart to keep your expenses as low as possible and invest your surplus income into high-growth assets.
Consider sharing accommodation with family or friends, or find an affordable rental arrangement.
If you’re renting, live within your means and, if possible, share with a partner or friends to reduce costs even further.
By investing your extra cash into high-growth assets, you’ll build wealth much faster than by simply paying down a mortgage.
What I’m suggesting is rentvesting – live where you want to live but probably can’t afford to own a property, and invest in real estate where you can afford to buy a quality property.
There are obvious advantages to investing in property, such as tax benefits, depreciation, and negative gearing that make this strategy particularly appealing.
Plus, rentvesting gives you the freedom to live where you want.
You’re not tied down by debt, and you have the flexibility to move around and explore.
Think about the end game
As Stephen Covey wisely said, “Begin with the end in mind.” It’s crucial to understand your long-term goals.
If you spend a decade or so building your asset base, you’ll find yourself in a much stronger financial position when you’re finally ready to buy a home.
You won’t have to settle for something less than ideal. Instead, you’ll have far more options and financial freedom.
In fact, you’ll likely be much wealthier at that point compared to someone who chose the traditional path of buying a home early and paying off a mortgage over the years.
In Conclusion
The rules of property ownership have changed, especially for younger Australians looking to enter the market in desirable areas.
Instead of settling for the second best, change your strategy.
Begin with the end in mind, set clear goals, commit to them and consider rentvesting.
In the long run, you’ll likely find yourself in a much stronger financial position with significantly more options.
