FALLING first homebuyer numbers are not as bad as they appear, thanks to a new breed of young Australians becoming property investors while still living at home with mum and dad.

Many twenty-somethings are cashing in on the tax and other financial benefits of investing, with an eye to moving into the home later or upgrading once its value rises.

The latest housing finance figures from the Australian Bureau of Statistics showed that in March investor loans grew four times faster than owner-occupier mortgages, with the proportion of first homebuyer loans at an 11-year low of just 14.7 per cent.

‘I think the official homebuyer numbers are not really giving the true story,’ said CoreLogic RP Data senior research analyst Cameron Kusher.

He said cuts to state government first homebuyer grants had reduced the incentives given to owner-occupiers, while negative gearing tax savings and low interest rates benefited investors.

As such, it often makes more financial sense to reject the grant, which in some states requires the buyer to live in the property, and go it alone.

Recent research by Mortgage Choice found that one-quarter of first home buyers said their first property was an investment property. In 2011 the number was below 10 per cent.

Mr Kusher said young investors were either living at home with their parents or renting in an area where they couldn’t afford to buy while investing in a more affordable area.

‘It’s definitely becoming harder to get their own home as an owner-occupier, but it’s good to see people looking outside the square and buying investment properties,’ he said.

Oracle Lending Solutions director Angelo Benedetti said a lot of young people were paying zero or cheap rent by remaining in the family home while dipping their toes in the property market.

‘They realise interest rates will never be as low as this again,’ he said.

Investing often made financial sense for young property buyers, Mr Benedetti said. ‘Someone is paying their rent, the interest is tax deductible and if it’s a new home you get depreciation benefits.’

Claire Madden, a director at social research group McCrindle, said the rising cost of housing, bills, study and digital technology prevented most generation Ys from getting into property as early as previous generations.

‘It’s unaffordable for many Gen Ys even though they’re at a life stage where they want to plan and build for the future. They can’t afford to buy where they want to live but it doesn’t mean they can’t afford property,’ she said.

‘Buying property has shifted from a heart decision to a head decision.’

CommSec chief economist Craig James said young people were renting or living at home while buying cheaper property further away from CBDs.

‘Gen Y haven’t given up on property. It’s just that where they would like to be living – near the city, close to their workplace and close to restaurants, the cost of that is too high,’ he said.

‘Back in my day people were quite content to have the quarter-acre block and live an hour’s commute from the workplace. A lot of Generation Ys don’t drive these days.’

Posted by Anthony Keane – NewsCorp Australia on 5th June, 2015