Priced out of Australia, Gen Y homebuyers look abroad
New research shows that more millennials are looking overseas for property investment opportunities to avoid high prices at home.
Research from international transfer company OFX has shown a spike in the number of 18-30 year olds purchasing property overseas. The number of overseas property acquisitions by OFX customers rose from 25 in 2011 to 123 in 2016. The information was gleaned from data from the OFX platform’s “reason for transfer” free text field.
The company said the number of 18-30 year olds purchasing overseas properties has been on a steady increase, averaging 23% per year. Meanwhile, OFX said overseas property purchasing by other age groups had gradually declined since 2013.
OFX noted that millennials were particularly active in overseas property acquisitions during periods in which the Australian dollar was strong against the US dollar and the British pound.
“Faced with an affordability crisis in the domestic market, millennials are pursuing overseas property acquisitions,” OFX chief operating officer Adam Smith said.
One such buyer is 30-year-old Paul Linabury from Fremantle, who says he bought a property in Japan as a long-term investment.
“It was brought with friends, with a view to renting out the property, when we are not using it as a holiday house. I would potentially use the capital invested in the house as security, which the banks can lend against. I didn’t buy with the intention of selling and using the capital gains to get into the property market in Australia, but even in the last six months the property has gone up in value, so you never know,” he said.