Bernard Salt looked at the demographics of employment growth. He found that 433,000 of the 1.041 million roles were given to employees in the 25 to 34 age group. These people are called the household forming segment. In comparison the 35 to 44 age group added just 108,000 roles.
This means there is more opportunity for the first home buyers segment, however, this is the group that struggle to enter the major capital city markets of Melbourne and Sydney, and have very limited capacity to bid up prices.
Interestingly, the 60+ segment had 252,000 jobs created over the six years and was double the growth of the 45 to 54 age group at 102,000. He argues this demographic offers the best opportunities with big payouts from down sizing the family home and are willing to pay more for the ideal property. What do they want? They want life style and downsizer properties.
The shocking news is that the 15 to 24 job market has only increased by 2,000 roles over the six years. While in the six years prior to this it increased by 181,000 roles.
Our exit strategy needs to be based on the capacity for capital growth. It is easy to see from this information why many investors target entry level pricing for housing. It is so affordable for all.
When looking at you target price for investment property -> it should be at or below the median price for that area.
Our holding strategies considerations suggest we need to appeal to the 25 to 34 age group who have the money to rent and want the lifestyle having been students with limited employment opportunities.
Getting investment property right is more complex that one size fits all for the advice and the building block, the property. Tailoring your investments can significantly increase your results.