A savvy Generation Z investor has revealed why she plans to continue renting as property prices climb to even more unaffordable levels.
Milly Bannister, 26, said being obsessed with buying a home would only create more anxiety.
‘It’s this chronic swelling of anxiety, frustration and pressure – a shared experience of pure terror to be quite frank,’ she told Daily Mail Australia.
‘Like a lot of the late Gen Z and early Millennial demographic, I’m frantically looking around me at peers who have managed to clutch onto a rung of the property ladder, some earlier than others, while constantly sharing the sentiment of, “Is it just going to keep going like this?”‘
Ms Bannister said soaring property prices were stopping many young people from having the confidence to invest their savings and build future wealth.
‘While there is so much uncertainty, mixed opinions and a constantly rising cost of living, it can feel really tricky to make any big money decisions,’ she said.
Saving for a 20 per cent mortgage deposit now typically takes at least a decade, even for those earning an above-average salary.
To help her achieve that goal, Ms Bannister has turned to exchange traded funds, where investor returns are linked to an index of shares listed on the Australian Securities Exchange, turning $2,400 into more than $78,000 in less than a year.
Generation Z entrepreneur Milly Bannister has revealed she would prefer to keep renting as property prices continued climbing to even more unaffordable levels
Milly Bannister, 26, said being obsessed with buying a home would only create more anxiety
‘In the meantime, saving a pool of money for when you’re ready and having it grow while you wait feels like the next best thing,’ she said.
She now has a Stockspot account which keeps track of her share market and ETF investments – hoping to one day fund a mortgage deposit with these returns.
‘I feel comfortable knowing I can draw funds from Stockspot if I need them to help fund a down deposit on a house, but ultimately I’d love to just let time and compound interest do its thing and retire smugly, thanking 26-year-old me for making such a bloody great call,’ Ms Bannister said.
The founder of the youth mental health charity Allknd has been investing $300 to $500 a fortnight in her portfolio during the past year, and reports seeing ‘very satisfying growth’.
This strategy has seen her turn an initial $2,400 deposit in September 2023 into $78,242.60, Stockspot figures provided to Daily Mail Australia showed.
Ms Bannister said investing in exchange-trade funds was a much better strategy than leaving money in the bank, admitting she was initially slow to embrace the smarter approach to investment after a friend suggested it to her.
‘My investment goals are more around the long-term and so my Stockspot portfolio is really a replacement for the traditional savings account that sits dormant gathering dust,’ she said.
Ms Bannister said expensive home prices were stopping many young people from having to confidence to invest their savings
‘I had a friend recommend Stockspot to me and I felt like it was the right time to action this to-do list item that had stayed on the bottom of my priority list for a while, as it felt too big and tricky to do.
‘I’ve heard female finance mentors say something along the lines of “the best time to invest is yesterday. The second best time to invest is today”.
‘That really sums it up. The resource is there, use it.’
During the past year, the ASX200 has climbed by 8.6 per cent, which is significantly higher than the 4.75 per cent return payable on a savings account with a major bank.
Australian house prices in the same period have risen by 8.4 per cent to an even more unaffordable $860,454, CoreLogic data showed.
This a beyond the $640,000 limit for an average-income earner on $98,218 buying property with a 20 per cent mortgage deposit, which means only couples with typical pay can afford a home.
CoreLogic calculated that someone earning a low, six-figure salary would still take more than a decade to save up for a 20 per cent mortgage deposit – making smart investments even more essential for those wanting to get into the property market.
