First-time buyers are increasingly opting for an investment property rather than a home, a Mortgage Choice survey has found.


Described as ‘rentvestors’, a third of investors in 2016 were first-time buyers who had not yet bought their own home. This compares to when the property boom was heating up in Sydney two years ago, when 20% of investors fell into this category.


Mortgage Choice chief executive John Flavell says many first-time buyers “have come to the realisation that they may not be able to afford to buy their first home in their dream location” and, instead of waiting to buy something less desirable, saw investing as a better financial option.


This well-established shift means the official statistics (showing low first-home-buyer activity in NSW and figures below 10-year trends in Victoria and Queensland) understate the buying activity of young Australians.


“Rentvestors purchasing investment properties are not documented as first-home buyers in the data, which is skewing the figures,” Flavell says.


Identified as the “most common new buying habit” in LJ Hooker’s The (new) Australian Dream white paper last year, Google Trends shows the term ‘rentvesting’ began to get traction in early 2015. Since then, online searches with this term more than tripled.