PHOTO: Carina Stathis
The Real Culprits Behind Soaring Property Prices in Australia
Young Australians who are losing hope of ever getting onto the property ladder say attending just a handful of auctions exposes exactly who is to blame for soaring prices.
If you’ve been to a house or apartment auction recently, it’s clear as day who is pushing up the bids far beyond what any millennial or Gen Z could possibly afford. And no, it’s not new arrivals or cashed-up foreign investors.
The worst offenders aren’t even the so-called ‘mum-and-dad landlords’ who splash out their savings and superannuation on properties to rent out. Instead, it’s the ‘downsizers’ who are aggressively overbidding for the small houses and units once considered starter properties for young Australians.
Often overlooked in discussions about the housing crisis, Aussie retirees with adult children who have flown the nest are selling their family homes and downsizing. My partner and I are looking to buy, and with every open home, my palms would be sweaty with excitement and my cheeks hot in anticipation. That is, until I took a look around and saw who my competition was, and these feelings were soon replaced with a cold sense of doom.
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I attended many auctions and noticed it was predominantly retired ‘downsizers’ snapping up the homes typically sought by first-time buyers, not foreign investors or landlords. There was simply no way to outbid retirees whose pockets are bursting with funds from the sale of their former homes, acquired when prices were a small fraction of what they are now.
Realtor and self-made millionaire Adam Flynn said the situation is a nationwide issue and the government must create more incentives for first-time buyers only. The 43-year-old from Melbourne told FEMAIL younger generations stand little chance of outbidding their cashed-up elders – except those with financial help from their parents.
Self-made multimillionaire real estate agent Adam Flynn (pictured) said, ‘For first-home buyers, it’s really tough for them to compete with people that are looking to downsize’
“This situation isn’t isolated to a particular geographical location – it’s Australia-wide,” Mr. Flynn said. “When people grow older, their life is cemented in certain suburbs. Their doctors, supermarkets, dentists, family, and friends are all in one area. And so they aren’t willing to move out of where they’re familiar with.”
Mr. Flynn also pointed out how people are living longer and want to remain independent rather than go into a retirement village. So downsizing is the perfect solution for them. “What we’re finding is the older generations are looking to sell their large four-bedroom home because the kids have moved out, the property is too big, and the maintenance is too much for them to handle,” he said. “So they buy a smaller two-bedroom home but stay in the same suburbs.”
“For first-home buyers, it’s really tough for them to compete with people that are looking to downsize. For this reason, a lot of young people are going to inspections and auctions with their parents.” Mr. Flynn warned that if millennials and Gen Z want to be competitive, they need to rely on the bank of mum and dad to provide support because otherwise, they likely won’t have the budget to work with.
Commenters on a viral TikTok video about the issue shared their own experiences, with many saying they would have to wait for an inheritance to be able to buy a home. “It sounds morbid and cruel but sort of looking forward to when both my parents kick the bucket. I’m gonna take their funds straight into buying the house I want,” one wrote, expressing a taboo a growing number of young Aussies quietly feel.
‘My partner and I are looking to buy – and with every open home, my palms would be sweaty with excitement and my cheeks hot in anticipation… that is, until I looked around and saw who my competition was, and these feelings were soon replaced with a cold sense of doom’
Another agreed, saying: “I feel the exact same way – the only way I see myself having my own home is either my mum’s current home, or selling that and using the money to buy one.” Others said they too have seen boomers snatch up properties, with no loan required. “I feel you, we had the same a few years ago in Sydney – the boomers basically were putting in first bid and going $200,000 to $400,000 over [the] price guide, knocking us all out in one bid,” another said. “We experienced the same purchasing in Brisbane. Hundreds of people at inspections (mostly boomers) and we had to compete with cash offers until we decided to look at double-story houses instead,” one more wrote.
What’s the solution? Mr. Flynn suggested there should be government-led developments specifically for first-time buyers, with eligibility criteria attached to contracts. They would be an inverse of the retirement home – a complex restricted to younger first-time buyers.
In the meantime, he shared his advice for young Aussies currently in the market to buy their first home. “Be open to different types of properties and vendor circumstances, such as people looking to sell urgently from divorces or deaths,” he said. “Make multiple offers on various properties, compromising on some features while maintaining core requirements.”
Adam also suggests considering properties that need renovation or updating, as they may be less appealing to downsizing boomers who want move-in-ready homes. Focusing on metropolitan areas is better for long-term capital growth compared to regional locations, even if it means overextending slightly within limits. “Also use a different investment strategy – for example, pay the minimum deposit possible, opt for interest-only payments, and use the money saved to invest in additional properties over time,” Adam said.
SOURCE: THE DAILY MAIL