The Burrow
Mar 7, 2024
Buying or renovating a property can be very expensive. Cost of living is on the rise, inflation is high and the Australian property market continues to climb. It is harder than ever for people, especially first home buyers, to realise their property goals. However, owning a home can still be achievable with appropriate financial planning and patience.
To find out who might be in the market for a home loan in the near future and how they aim to save money, the home loan experts at Compare the Market Australia studied a sample of over 3,000 Australian, Canadian and American respondents.
This is what we found.
So, who exactly might be on the hunt for a home loan? According to the survey: younger people. More than 70% of Generation Z and Millennials were looking to either buy a house or perform extensive renovations sometime in the next 10 years. In comparison, only about 54% of Generation X and 25% of Baby Boomers said as much in total.
Overall, Canadians were the most likely to have future housing plans (61.5%) and Americans the least (47.3%).
Interestingly, Aussie Gen Z were less optimistic in terms of home ownership plans (62.2%), compared to Canadian (81.6%) and American (74.5%) Gen Z counterparts.
Gen-Z | Millennials | Gen-X | Baby Boomers | Total | |
Combined | 72.8% | 71.6% | 54.2% | 24.7% | 53.6% |
Australia | 62.2% | 71.7% | 56.3% | 25.4% | 52.1% |
Canada | 81.6% | 76.4% | 57.2% | 31.3% | 61.5% |
United States | 74.5% | 65.1% | 48.8% | 19.7% | 47.3% |
When we asked people what they were planning to do to save money for their property plans, the most common answer – unsurprisingly – was to reduce non-essential spending. Gen-Z were the least willing to reduce non-essential spending though (45.9%), while Millennials were the most likely (51.7%).
The second-most popular way of saving money for property plans was taking up a second job or side hustle. Overall, 35.4% of respondents said they were planning to do this, although it was most common among younger generations at Gen Z (50.5%) and Millennials (40.2%).
Younger people clearly still want to own and improve property, however it seems many feel like they need multiple income streams per person to accomplish this feat.
Gen-Z | Millennials | Gen-X | Baby Boomers | Total | |
Move in with family or friends to save on housing costs | 37.5% | 20.1% | 9.6% | 7.4% | 18.7% |
Move to a more affordable area | 38.5% | 31.7% | 26.6% | 15.8% | 29.4% |
Take on a second job or side gig | 50.5% | 40.2% | 27.1% | 16.7% | 35.4% |
Enter giveaways or fundraising raffles where a house is the prize | 11.0% | 13.2% | 8.7% | 8.4% | 11.0% |
Gamble or bet money | 8.1% | 8.7% | 5.6% | 4.2% | 7.2% |
Sell family heirlooms or personal valuables | 7.8% | 7.1% | 7.5% | 10.2% | 7.8% |
Move into a share house with strangers | 6.0% | 5.2% | 3.5% | 2.8% | 4.6% |
Use the equity in an existing property as collateral | 7.8% | 18.5% | 24.5% | 27.0% | 19.3% |
Borrow money or rely on financial support from family/friends | 8.1% | 11.4% | 11.3% | 7.9% | 10.3% |
Reduce non-essential spending | 45.9% | 51.7% | 49.9% | 49.3% | 49.9% |
Invest in the stock market | 30.4% | 27.2% | 19.8% | 12.6% | 23.9% |
Other | 1.8% | 2.2% | 1.6% | 7.0% | 2.6% |
None of the above | 3.9% | 5.1% | 8.5% | 14.9% | 7.1% |
Almost half of people (44.3%) expect to be able to save for their property plans within the next three to five years.
Boomers were the most likely group to expect to save for less than one year, but strangely also the most likely to think they will need 10+ years to reach their goal.
Gen-Z were more pessimistic than other generations, with the highest portion of people believing it would take them six to ten years to save for their property plans.
Combined, over 75% of people believe they will be able to save enough money for their plans within the next 5 years.
Gen-Z | Millennials | Gen-X | Baby Boomers | Total | |
Less than 1 year | 6.4% | 5.1% | 9.6% | 14.0% | 7.7% |
1-2 years | 19.8% | 26.2% | 24.5% | 24.2% | 24.3% |
3-5 years | 40.6% | 47.2% | 43.1% | 42.8% | 44.3% |
6-10 years | 26.1% | 16.9% | 15.1% | 10.7% | 17.2% |
10+ years | 7.1% | 4.7% | 7.8% | 8.4% | 6.4% |
The research found that almost half of people have to dip into their property savings every so often to afford other expenses (46.8%). Older generations were generally less likely to have to do this – 40.0% of Boomers said they won’t have to dip into their savings at all. Interestingly however, Boomers were the second-least likely generation – after Gen-Z – to not have any savings in the first place!
Australians were the most likely nation to have to dip into their savings on occasion, however Americans were the most likely to not have any savings at all and to have to dip into their savings all the time.
Gen-Z | Millennials | Gen-X | Baby Boomers | Total | |
Never | 26.1% | 26.2% | 30.1% | 40.0% | 29.1% |
Every so often | 45.2% | 51.7% | 45.4% | 35.8% | 46.8% |
All the time | 12.4% | 11.5% | 11.3% | 9.8% | 11.4% |
I don’t have any house deposit savings to dip into | 16.3% | 10.6% | 13.2% | 14.4% | 12.8% |
General Manager of Money at Compare the Market AU, Stephen Zeller, emphasised the importance of setting realistic expectations when it comes to your saving goals.
“There is no denying that owning or improving a property can be extremely expensive. For many people, buying a property will be the biggest purchase of their life, and a home loan might be the largest financial commitment they ever make,” Mr Zeller said.
“Saving for such a purchase will probably take a lot of time, patience and mindful money management. It is important to plan accordingly, budget effectively and have realistic expectations if you want to achieve your goal.
“Remember, saving is not always an easy or linear thing. Some months you might save loads of money, but other times you might run into unexpected costs and not save as much as you hoped.
“Sometimes you might even have to dip into your savings to afford other important things at any moment in time – and that can be okay – but try to have a plan to get back on track.”
If you are part of the 52.1% of Aussies with property plans within the next 10 years and are in the market for a home loan, you could try Compare the Market’s free online comparison tool to help you search for a plan that suits your individual circumstances.
Compare the Market commissioned PureProfile to survey 1,001 Australian, 1,001 American and 1,000 Canadian adults in November 2023.
They generations referred to above correlate to the following age groups: