Millennials are more likely than baby boomers to spend $100k on property

What would most millennials do with $100,000 prize money? Hint: it has nothing to do with smashed avocado.

Findings from a new survey reveal millennials and generation Xers are more likely than Baby Boomers to spend $100,000 in prize money on property.

The survey, which was conducted by Galaxy Research and commissioned by Subway, asked 1000 Australians the question: “If you won $100,000 in a prize draw, which one of the following is the one thing that you would spend the majority of the prize money on?”

Respondents were required to choose an answer from a list of 10 predetermined responses including: put a deposit on a home/pay down a mortgage; take an exotic trip to overseas countries; go to a World Cup final/follow your team around the world; and, hire a chauffeur, chef or butler.

The dataset was then weighted and projected to the population based on the latest ABS population estimates.

When broken down by generation, 54 per cent of millennials (specified in the data as those aged 18-34) would choose to spend the money on property, compared to 59 per cent of generation Xers (those aged 35-49), and 49 per cent of Baby Boomers (50 to 64 years of age).

The only age group who didn’t choose property as their most preferred option were those aged over 65. In this age group, the most popular choice was travel (chosen by 36 per cent of this age group), with property coming in second at 31 per cent.

“The generational difference when it came to buying a house versus wanting to travel to exotic destinations was certainly surprising!” Subway PR and communications manager Ben Miles says.

“I think this strong focus on financial security from millennials is a comment on our economy and housing market to be honest.”

Following property and travel, the most popular responses overall were to buy a car/motorbike/boat (10 per cent of those polled); pay for your education/university/tertiary education (6 per cent); and start a company (5 per cent).

“Prizes, bonuses from work, or tax refunds are pretty regularly thought of as ‘found money’, which does lead to a bit of spending on luxuries, so it’s completely normal that people have also identified some really exciting extras like a great holiday, new car or share in a yacht,” says Michael Miller, certified financial planner at MLC.

“I think a little of both is a great idea; take a good chunk of that money and use it to get ahead financially, but if you can do that and have a little extra leftover to treat yourself, then you’re looking after yourself now and in the future!”

Certified public accountant and founder of Winner Partnership Susan Wahhab says the findings indicate millennials are more interested in buying property than they are frequently credited for, and are simply planning this for later in life.

“I think the stats give us hope in our young people, despite the constant media bashing of young, hardworking and socially conscientious Aussies,” Wahhab says.

“Give them time to get their life in order – finish education/trade and pay down the HECS – and you will see them start saving to buy a house before their 30th birthday.”

Founder of Women with Cents Natasha Janssens says the generational differences are a reflection of the circumstances and lifestyle experienced by young Australians today.

“They live in an age of consumerism, in a time where social media means you are constantly bombarded by advertising and brag reels,” she says.

“I think that in some ways it was easier for older generations to save, as credit cards and personal loans were harder to come by, therefore they had no other choice but to save for what they wanted…I would suggest that if older generations had grown up with today’s technology and financial markets, they would likely be making the same choices as the millennials are today.”

Other factors that experts say create challenges for young people looking to enter the property market are rising city house prices and diminishing employment security.

“There are many financial barriers facing young first home buyers including soaring property prices in capital cities and lifestyle factors such as servicing HECS/HELP debt, a trend of unpaid internships and a greater incidence of casual work,” says money expert at finder.com.au Bessie Hassan.

“Generally speaking, I wouldn’t say previous generations have been more financially responsible compared to millennials, as they are living in different times with different values and market factors at play.”