The Rise of ‘Stayvestors’: Young Buyers Navigating Sydney’s Property Market
As property prices soar in Australia, a significant trend is emerging among first-home buyers: the choice to live with their parents while purchasing investment properties. Arjun Chowdhury, a 25-year-old finance professional, exemplifies this shift. He acquired an off-the-plan apartment in Willoughby last August and plans to rent it out to help manage his mortgage payments.
Chowdhury’s situation highlights the challenges faced by young buyers in Sydney’s competitive real estate market. He acknowledges the difficulty of servicing a mortgage, particularly given the current interest rates. "Being someone who just recently entered the workforce and on a single salary, it’s really challenging," he shared.
To make homeownership feasible, Chowdhury saved a 10% deposit for his new property, with assistance from his parents for stamp duty costs. Initially considering a residence for himself, he pivoted to an investment strategy when it became clear that securing a home within the grant eligibility range was unrealistic.
Chowdhury explained, "Sydney prices are now so expensive that it’s very difficult to find something within that range." He abandoned the idea of an owner-occupied home in favour of an investment property, allowing him to utilize rental income for mortgage repayments without the immediate need to move in.
This approach has garnered the label ‘stayvestors’—a growing demographic of young buyers who forgo immediate independence for strategic financial gain. Chowdhury admits that living at home might seem like a sacrifice, yet he views it as a smart financial move that enables him to enter the housing market sooner than many of his peers.
Expert Insights
Industry professionals are noting this trend as a tactical response to the steep costs associated with the property market. Tim Abbott, director of projects at Ray White, anticipates that the ‘stayvestor’ trend will gain momentum. He points out that it’s becoming increasingly common for first-home buyers to initially purchase investment properties with the intention of living in them later.
However, this strategy comes with risks. Abbott cautions buyers about the necessity of being able to service their mortgage without relying heavily on rental income, which may not always be guaranteed. Furthermore, purchasing a property solely as an investment may exclude first-home buyers from qualifying for certain government grants.
Chowdhury’s financial strategies are also indicative of a broader trend: the increasing reliance of young buyers on parental support. A recent Mozo study found that 75% of parents now contribute financially to their children’s home deposits, significantly up from 33% in 2021, with an average gift of around $74,040.
Despite the financial interdependence, Chowdhury stresses the strength of his relationship with his family, stating that his parents not only support his living arrangements but actively encouraged his entry into the property market. He appreciates this familial bond, citing cultural norms that often diminish the pressure to move out at a young age.
Planning for the Future
Chowdhury does not currently pay rent to his parents but contributes to household expenses. He plans to rent out his one-bedroom unit once completed, with rates in the area ranging from $600 to $700 per week. As he navigates these changes, he intends to revisit the decision to move out in a few years, once he reassesses his financial landscape.
In conclusion, the trend of ‘stayvesting’ reflects the evolving dynamics of homeownership in Australia, particularly as financial pressures mount on younger generations. As more young professionals prioritise strategic investments over immediate independence, the relationship between parents and adult children continues to adapt, fostering a cooperative approach to navigating the complexities of the housing market.
For more insights, keep following developments in Australian finance and property trends.
