Millennial’s are leading the charge in property investment – new data reveals

It's fascinating to see how millennials are reshaping the landscape of property investment.

Recent data from CommBank reveals that this generation isn't just actively investing in properties; they're also confidently navigating this journey solo.

In 2023, millennials, those born between 1981 and 1996, represented a striking 46% of CommBank's new property investors.

Gen X followed, contributing to 37% of the new investment property purchases over the year.

What's particularly noteworthy is the average age of property investors now sits at 43 years, with the average loan size just tipping over the $500,000 mark.

Solo ventures and lending trends

Dr. Michael Baumann, Executive General Manager of Home Buying at Commonwealth Bank, highlighted a unique trend: a significant portion of millennials are choosing to invest in property individually.

"Almost one-third of millennial property investors are making these investments on their own," he notes.

In the broader scope, the Australian Bureau of Statistics data from the past year shows that investors have been a major force in new lending, witnessing an 18.5% growth.

This surge outpaces the growth in lending to first-home buyers (13.2%) and owner-occupiers (3.4%).

Dr Baumann also touched on the growing trend of 'rentvesting.'

This strategy allows Australians to invest in affordable areas while continuing to rent in their preferred locations.

It's a clever approach to enjoy the best of both worlds – building property portfolios without sacrificing their current lifestyle.

Top investment hotspots

In terms of hotspots for property investments in 2023, the top postcodes were:

• Sydney CBD (2000)
• West Melbourne (3029)
• North West Sydney (2765)
• North Melbourne (3064), and
• Kellyville in North West Sydney (2155)

Interestingly, Dr Baumann pointed out that many of these areas have been investor favourites for years.

In fact, three of the top-performing postcodes from 2019 remained on the list in 2023.

A final note for investors

But, as I always say, while these types of lists make interesting reading, I would not recommend all of these for investing.

When it comes to property investment, the focus should be on investment-grade properties in A-grade locations.

Never follow a trend or buy in hotspots or growth areas because these won’t give you the long-term growth that you’re looking for.

I’m talking about areas and properties which hold their value over the long term, rather than benefit from an uptick in demand.

There are around 11 million dwellings in Australia, and they’re not all created equal.

In fact, in my mind, fewer than 4% of the properties on the market at any given time are what I would call “investment grade”.

We’ve written plenty of articles and voiced many podcasts over time to share what I consider an investment-grade property is (more here and here, if you’d like to explore), so I won’t go into the characteristics of a great investment or the type of properties that fit these criteria.

Instead, I encourage you to consider:

• What your investment goals are
• Why do you want to invest in property
• And how real estate can help you reach your goals?

Your property journey might involve a Melbourne-based property.

It could involve two.

It may even involve 10!

Or it could include none.

The right investment strategy for you is personal and based on your own unique risk profile, income, expenses and goals.

Taking all of these into consideration to work out your “goal” is key because once you know what you’re aiming for, it becomes much easier to plan the steps you need to take to get there.

About Adam Hubbard Adam Hubbard is a senior Wealth Strategist at Metropole and his many years of real estate and wealth creation experience gives him a holistic perspective with which he helps his clients safely grow their wealth through property.