Gen Z eager to own property despite financial woes

However, Loan Market Neo mortgage broker Tammy Olive told The Adviser that the pursuit of home ownership is still alive among this Gen Z cohort.

“Here, on the Gold Coast, rents have gone through the roof,” she said.

“There’s still a genuine demand from Gen Z to break for property ownership, but very rarely are first home buyers able to meet serviceability on their own.”

Ms Olive stated she is regularly referred Gen Z buyers who are looking to make the move from renting to property ownership, however, require outside help to secure a loan.

“Nearly all applicants have either a guarantor or significant help from the Bank of Mum and Dad,” Ms Olive said.

“While rents have gone up considerably so too have property prices and building up a deposit in your early to mid-20s can be very difficult.”

She further stated that financial wellbeing “isn’t covered in school curriculums or explained well enough at the family dinner table”.

She said buy now, pay later (BNPL) had been a growing problem within the demographic and was impacting borrowing capacity.

“When I run a credit report for a new client, they’re actually quite surprised at the impact that BNPL can have on their borrowing capacity,” she said.

“A BNPL account with a $5,000 limit could impact someone’s borrowing capacity by as much as $30,000.”

Ms Olive said that she sets in savings plans and options to pay down credit card debt, close BNPLs, review car finance and other initiatives for Gen Z clients who are unable to meet serviceability requirements.

“Once you’ve set a plan in place, Gen Z clients go away feeling motivated to follow through with the plan. Speaking to a broker provides them with guidance and clarity,” she said.

ASIC’s data further revealed that nine in 10 Gen Zs have “strong desire and intent” to improve their money skills and financial confidence regardless of the hurdles facing them.

According to ASIC, 49 per cent of Gen Zs who are not financially confident said that feeling overwhelmed was their biggest barrier to financial confidence, while 42 per cent stated they didn’t know where to begin.

Qld’s youth still chasing home ownership dreams

Preceding the release of ASIC’s findings, research from non-major bank RACQ Bank (RACQ) found that almost one in four Queenslanders aged 18–34 intended on buying a home within the next 12 months.

The main drivers influencing buying decisions were cost, location and size, with 70 per cent of respondents considering cost as one of the top factors when buying a new home, the research found.

However, the research also found that one in three respondents from this cohort indicated that they were unable to save towards future goals, half of whom said while they were saving money, it wasn’t enough.

Additionally, 43 per cent of Queenslanders said their mortgage or rent was the biggest priority on their household budget.

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