With house prices climbing mountains while salaries seem to be stuck on the slopes, buying property in this city can seem downright impossible for younger generations, especially for Gen Z.

But while traditional routes may appear blocked, there are some crafty ways Gen Z buyers can enter the Sydney property market without needing to sell a kidney or win Lotto.

Below I’ll outline three innovative strategies Gen Z buyers can use to secure a home in Sydney – backed by data. Let’s see how the next generation can turn the tables and find their place in the Sydney property scene.

Innovative Buy Method #1

Fractional Property Investment: Owning a Slice of the Pie

Buying a whole house in Sydney may be out of reach for now, but what about buying a piece of one? Enter ‘fractional property investment’, a strategy that allows multiple buyers to collectively purchase a property, each owning a fraction of the asset.

How does this wizardry work? you ask. Think of fractional ownership as the “Uber Pool” of property investment. Several buyers purchase shares in a property, reducing the financial load on any single individual. Platforms like DomaCom enable investors to own shares of a property without fronting the entire deposit and mortgage alone.

Before you start thinking this must need a whole lot of money to get happening, the answer is nope. For less than you’d spend going to Europe for the Summer you can own a house in Sydney!

According to SQM Research, median house prices in Sydney are hovering around $1.6 million at present, a price tag that’s intimidating for any single buyer. But through fractional investment, Gen Z buyers can dip into the market by buying as little as a 1% share in a high-growth suburb, allowing them to benefit from capital gains over time.

Why buy the whole cow when you can own a slice of the beefcake? Fractional ownership lets Gen Z get on the property ladder without having to sacrifice an arm, leg, and five years’ worth of avocado toast.

Here’s an example, if you buy a $10,000 stake in a property worth $1 million in a high-demand area like Inner West Sydney, your fraction can increase in value as the suburb experiences growth, allowing you to eventually sell your share at a profit or use it as leverage for a future solo purchase.

Check out DomaCom at https://www.domacom.com.au to learn more about fractional property ownership options available in Australia.

Innovative Buy Method #2

Rentvesting: A Modern Twist on Owning and Renting

Rentvesting has become a popular strategy for Gen Z buyers who want to own property but still live close to work or city amenities.

This method involves buying an investment property in an affordable area and renting it out while continuing to rent where you live closer to the city.

How does this wizardry work? you ask. Rentvesting allows buyers to start building equity in property without needing to live in their first purchase. By buying in an affordable area and renting it out, Gen Zers can cover mortgage costs with rental income, while using tax breaks that come with investment properties to help manage expenses.

According to CoreLogic, affordable Sydney suburbs like Campbelltown, St Marys, and Penrith still have median house prices under 1m compared to 1.7m closer to the CBD. Rental yields in these suburbs are also high, making it possible for Gen Z buyers to cover a large portion of their mortgage with rent.

Rentvesting is like dating a reliable suburb while keeping your fling with inner-city life alive – commitment issues never felt this profitable.

Here’s an example; by purchasing a $850,000 property in Penrith with a rental yield of around 4.5%, Gen Z buyers can generate a rental income that covers most of their mortgage payments, using the saved capital to live closer to work or enjoy city life.

Innovative Buy Method #3

Buying with Friends or Family: Co-Ownership Arrangements

Buying a home with a friend or family member might feel like taking the group project to the next level, but co-ownership is growing in popularity as property prices soar.

This option allows buyers to split the down payment and mortgage responsibilities, making it possible to purchase a home that would otherwise be out of reach alone.

How does this wizardry work? you ask. Co-ownership involves signing a joint mortgage and property agreement, specifying each party’s financial obligations, ownership percentage, and exit strategy. With the help of a legal co-ownership agreement, buyers can avoid future conflicts and ensure a smooth partnership. 

According to Domain, even first-home-friendly suburbs like Liverpool and Blacktown have median house prices of around $950,000. For a solo buyer, a 20% deposit would mean saving $190,000 – a steep figure. By pooling funds, two buyers could get on the property ladder with a more manageable $95,000 deposit each.

Sharing a house with friends? It’s just like the old share house, but with equity and fewer passive-aggressive post-it notes left on the fridge.

For example; Imagine two friends co-owning a $1 million property in Liverpool. With a 50/50 split, they each contribute $50,000 for a 10% deposit and share the mortgage, meaning they can both start building wealth in property without being over-leveraged.

Let Kitty & Miles Guide You Through the Maze

Buying property in Sydney is a daunting task, but with creative approaches, it’s not impossible.

At Kitty & Miles, our expert Real Estate Buyers Agents specialise in helping first-time buyers navigate the complexities of the Sydney market. Whether you’re considering fractional investment, rentvesting, or co-ownership, our team can offer tailored advice to fit your unique financial situation and long-term goals.

Our award-winning knowledge of Sydney’s suburbs, growth areas, and investment potential ensures that your hard-earned money is strategically placed. Contact us today at support@kittyandmiles.com.au  to learn more about how we can help you break into the Sydney property market and secure your financial future.

The Takeaway is About Turning Challenges into Opportunities

As property prices in Sydney continue their seemingly unstoppable ascent, Gen Z buyers need more than grit to enter the market – they need strategy, creativity, and a clear plan.

Whether it’s through fractional ownership, rentvesting, or co-ownership, these alternative strategies can help younger buyers build equity without succumbing to the astronomical costs of solo ownership in the city.

Buying property in Sydney isn’t just about reaching a destination; it’s about understanding the journey and the smartest paths available. So, while prices may seem intimidating, the dream of homeownership doesn’t have to remain out of reach. Embrace innovation, partner with friends, and get strategic with your choices.

The Sydney property market may be tough, but with the right mindset – and a little help from Kitty & Miles – you just might find your own slice of Sydney.

Happy house hunting, Gen Z! 🔑🏡🥰