For generations, Australians have embraced the idea that buying a home is the most reliable route to building wealth.
But when an almost identical apartment in her Melbourne building recently came onto the market, 29-year-old technology worker Brielle Basmadjian made a decision many Australians would find surprising: she chose not to buy.
Although she could afford to purchase the Malvern apartment she rents, Ms Basmadjian decided she was better off continuing to invest in exchange-traded funds (ETFs).
‘I certainly looked at it because it’s not beyond the realms of possibility for me to purchase the apartment that I’m in,’ she told Our News Outlet.
‘But running the numbers, it didn’t make a lot of sense for me.’
Ms Basmadjian is part of a growing number of younger Australians putting their savings into ETFs instead of directing every available dollar towards a home deposit, as high property prices, borrowing costs and ownership expenses reshape the traditional Great Australian Dream.
Unlike many renters, she has already experienced home ownership.
Ms Basmadjian bought a property with a former partner in her twenties, but the relationship ended and the home was eventually sold.
Brielle Basmadjian is among a growing number of younger Australians investing in ETFs rather than putting every spare dollar towards a home deposit
Although she could afford to buy the Malvern apartment she rents, Ms Basmadjian chose to continue investing in ETFs
The latest ASX research found that almost three million Australians now own ETFs, more than twice as many as in 2020
‘I actually did own property briefly with a partner during my 20s at one point, but we split ways and we ended up selling,’ she said.
Rather than immediately returning to the property market, she has continued growing her ETF portfolio, which she began building through passive investing at the age of 20.
Ms Basmadjian sometimes wonders whether she missed out on Australia’s housing boom, although property prices are now sliding after five interest rate rises this year and Federal government tax reforms. Even so, she believes renting while investing has given her greater flexibility.
‘I did think for a while that, “Oh God, I missed the boat”,’ she said.
She continues to see benefits in property ownership, but says many young Australians are confronting a housing market that is vastly different from the one previous generations experienced.
‘I still have some of those old beliefs ingrained in me from my family about bricks and mortar. I think there’s definitely something to be said for the growth property can deliver,’ she said.
‘But it’s become extremely challenging for young people to get into the market. If you’re saving money and it’s just sitting in a bank account, not really working for you, that money may as well be invested and growing in some way.
‘Even if I dumped $150,000 into a deposit, I don’t think I would actually be able to maintain my current lifestyle, the apartment I’m in and the travel that I can afford.’
Interest in investment property has nearly halved, dropping from 36 per cent in 2023 to just 20 per cent in 2026
The changing attitude is reflected in the data. The latest ASX research shows that almost three million Australians now own ETFs, more than double the number recorded in 2020.
By contrast, interest in investment properties has nearly halved, falling from 36 per cent in 2023 to 20 per cent in 2026.
For investors aged between 18 and 29, ETFs are now as popular as investment properties for a first investment.
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Eric Peterson, CEO of Trading 212 Australia, who has been trading since 2001, said property investing involved several hurdles that could make it less attractive to younger Australians.
‘Having to come up with a sizable deposit, accessing credit from a bank, paying stamp duty and broker fees are all intimidating barriers to entry,’ Mr Peterson said.
‘In bear markets, losses can exceed the capital you invested in the asset. With investing in share markets, much of that simply doesn’t exist.’
Trading 212 allows customers to buy and sell ‘fractional’ shares—parts of a stock that might otherwise be unaffordable—with zero brokerage fees.
Trading 212 founder Eric Peterson has been investing since 2001 and says property presents several potential barriers for younger investors
Mr Peterson said all markets can be volatile in the short term, but long-term, before-inflation returns average about 10 per cent.
‘Even longer periods can somewhat deviate from this. For example, the S&P (Standard & Poors 500, an index which tracks the top 500 companies on the US stock exchanges) has returned over 15 per cent per year, on average, over the past decade.
‘Returns on broad based market ETFs (SPYs, QQQ, for example) are around the same as the broader market and offer a cost effective way of investing across a great number of securities in a single trade.
‘Other products, such as bonds, commodities, crypto, etc, all have their own risk profiles which have historically returned greater or lesser amounts that align with their underlying volatility.’
Perth renter Jasper Twigg still hopes to buy a home one day, but is investing in ETFs while he builds a larger deposit.
‘If house prices hadn’t surged by so much in the last few years, I probably would have bought a house already or at least looked at buying one more seriously,’ he said.
‘Given how much they’ve gone up, I’m probably not there yet in terms of a deposit.
Jasper Twigg still intends to buy a home, but says ETFs are currently the most effective way to grow his savings while preserving his options
‘The last two years have been the period where I’ve pushed that dream out a little bit, given how expensive it’s become.’
The university research officer said renting had enabled him to live in Perth’s affluent western suburbs—an area he could not currently afford to buy in.
‘I’ve got friends who wanted to buy in places like Wembley, but they’ve had to buy in Joondalup instead because they just had to keep expanding the circle out to afford something,’ he said.
‘I’m renting in Wembley at the moment and, if you’re in a shared house like me, that cuts the cost down by three.
‘Renting lets you live in a more expensive location.’
Mr Twigg said he remained determined to buy a home eventually, but believed ETFs were currently the most effective way to increase his savings while keeping his choices open.
Stockspot founder Chris Brycki said he would ‘absolutely’ consider it a smart financial decision if a young Australian could afford to buy a unit but instead chose to invest in ETFs and rent.
‘More young Australians are waking up to the fact that buying property isn’t the only way to build wealth… and in some cases, it’s not even the best way,’ he told Our News Outlet.
‘Buying an overpriced apartment with a massive mortgage isn’t automatically a smart investment. It can become a ball and chain if you pick the wrong one or are unlucky at the top of the cycle.’
