A savvy Gen Z investor has revealed why she plans to keep renting as property prices rise to even more unaffordable levels.
Milly Bannister, 26, said obsessing over buying a house would only create more anxiety.
“It’s a chronic build-up of anxiety, frustration and pressure – a shared experience of sheer terror, to be honest,” she told Daily Mail Australia.
‘Like many of the late Gen Zers and early Millennials, I frantically look around at my peers who have managed to grab a rung of the housing ladder, some sooner than others, while constantly sharing the sentiment of, “Is this going to continue?”
Ms Bannister said high property prices were preventing many young people from having the confidence to invest their savings and build future wealth.
“While there is so much uncertainty, conflicting opinions and an ever-rising cost of living, it can be really difficult to make important decisions in terms of money,” she said.
Saving for a 20 per cent mortgage deposit today typically takes at least a decade, even for those earning an above-average salary.
To help her achieve that goal, Ms Bannister turned to exchange-traded funds, where investors’ 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.
Gen Z entrepreneur Milly Bannister has revealed she would rather continue renting as property prices continue to rise to ever more unaffordable levels.
Milly Bannister, 26, said being obsessed with buying a house would only create more anxiety.
“In the meantime, saving a certain amount of money for when you’re ready and letting it grow while you wait seems to be the best option,” he said.
He now has a Stockspot account that tracks his stock market and ETF investments, hoping to one day fund a mortgage deposit with these returns.
“I feel comfortable knowing I can withdraw funds from Stockspot if I need to fund a down payment on a house, but ultimately I’d love to let time and compound interest do their work and retire satisfied, thanking my 26 years for making such a great decision,” Bannister said.
The founder of youth mental health charity Allknd has been investing between $300 and $500 every fortnight into her portfolio over the past year and reports seeing “very pleasing growth”.
This strategy has allowed him to turn an initial deposit of $2,400 in September 2023 into $78,242.60, Stockspot figures provided to Daily Mail Australia showed.
Ms Bannister said investing in exchange-traded funds was a much better strategy than leaving money in the bank, admitting she was initially slow to adopt the smarter approach to investing after a friend suggested it to her.
“My investment goals are more long-term oriented, so my Stockspot portfolio is really a replacement for the traditional savings account that sits idle collecting dust,” he said.
Ms Bannister said high house prices were preventing many young people from having the confidence to invest their savings.
‘A friend recommended Stockspot to me and I felt it was the right time to implement this to-do list item that had been sitting at the bottom of my priority list for a while as it seemed too big and complicated to accomplish.
‘I’ve heard financial mentors say something like, “The best time to invest is yesterday. The second best time to invest is today.”
“That sums it up: the resource is there, use it.”
Over the past year, the ASX200 has risen 8.6 per cent, which is significantly higher than the 4.75 per cent return payable by a savings account at a major bank.
Australian house prices in the same period rose 8.4 per cent to an even more unaffordable $860,454, CoreLogic data showed.
This is above the $640,000 limit for someone on an average income of $98,218 buying a property with a 20 per cent mortgage deposit, meaning only couples on a typical income can buy a home.
CoreLogic calculated that someone earning a low six-figure salary would still need more than a decade to save for a 20 per cent mortgage deposit, making smart investments even more essential for those looking to enter the property market.