Here’s what I’ve noticed attending auctions to buy my first home – and hundreds of others agree

Young Australians losing hope of a successful career in the housing market say attending just a handful of auctions reveals who is responsible for rising prices.

If you’ve attended a house or condo auction recently, it’s obvious who’s driving up the bidding far beyond the reach of millennials or Gen Z generations.

And no, they are not newcomers or wealthy foreign investors.

The biggest culprits are not even the so-called ‘ordinary landlords’ who spend their savings and pension money on properties to rent out.

Instead, it is the ‘downsizers’ who are aggressively outbidding on the tiny houses and apartments once seen as starter homes for young Australians.

Discussions about the housing crisis often overlook the fact that retired Australians with adult children who have already left home are selling their family homes and downsizing.

My partner and I are looking to buy a house. Every time we open a house, my palms are sweaty with excitement and my cheeks are red with anticipation.

Until I looked around and saw who my competitors were. These feelings quickly gave way to a cold sense of foreboding.

There was simply no way to outbid the retirees who were flush with cash from selling their former homes, which had been purchased when prices were a fraction of what they would sell for decades later.

Realtor and self-made millionaire Adam Flynn said the situation is a nationwide problem and the government needs to create more incentives for first-time home buyers.

The 43-year-old from Melbourne told FEMAIL that younger generations have little chance of outbidding their wealthy elders – except for those who receive financial help from their parents.

“This situation is not limited to a specific geographic location but applies to the whole of Australia,” Flynn said.

“As people get older, their lives are stuck in certain suburbs. Their doctors, grocery stores, dentists, family and friends are all in one area. And so they’re not willing to move from an area they’re familiar with.”

Mr. Flynn also pointed out that people are living longer and want to remain independent rather than move to a retirement village, so downsizing is the perfect solution for them.

“We notice that the older generations want to sell their large four-bedroom house because the children have left home, the house is too big and the maintenance is too much for them,” he says.

‘So they buy a smaller two-bedroom house, but continue to live in the same suburb.

‘It is very difficult for first-time home buyers to compete with people who want to downsize. That is why many young people go to viewings and auctions with their parents.’

Mr. Flynn warned that if millennials and Gen Z want to be competitive, they need to rely on their parents’ support, or they may not have the budget to work with.

Commentators on a viral TikTok video on the issue shared their own experiences, with many saying they had to wait for an inheritance to be able to buy a house.

“It sounds morbid and cruel but I’m kind of looking forward to my parents both dying. I’m going to use their money straight away to buy the house I want,” one person wrote, echoing a taboo that a growing number of young Australians feel in silence.

Another agreed: ‘I feel exactly the same way. I can only see myself owning my own home if I use my mother’s current home, or if I sell it and use the money to buy a new home.’

Others said they too have seen baby boomers buy homes without needing a loan.

‘I know, we had the same thing in Sydney a few years ago – the baby boomers were basically making the first offer and bidding $200,000 to $400,000 more than [the] “A target price that would knock us all out at once,” said another.

‘We had the same purchase experience in Brisbane. Hundreds of people at the viewings (mainly baby boomers) and we had to compete with cash offers until we decided to look at two-storey homes instead,’ wrote another.

What is the solution?

Mr Flynn suggested that there should be government-led developments specifically for first-time home buyers, with eligibility criteria attached to contracts.

They would be the opposite of a retirement home: a complex accessible only to younger first-time home buyers.

In the meantime, he shared his advice for young Australians currently looking for their first home.

“Be open to different types of properties and seller circumstances, such as people who need to sell their home urgently due to divorce or death,” he said.

‘Make multiple bids on different properties, compromising on some features but maintaining the basic requirements.’

Adam also advises looking at homes that need renovation or updating, as these may be less attractive to baby boomers who are downsizing and want a home they can move into right away.

For long-term capital growth, it is better to focus on metropolitan areas than regional locations, even if this means expanding a little further within certain limits.

“Also use a different investment strategy. For example, pay the minimum down payment possible, opt for interest-only payments, and use the money saved to invest in additional properties over time,” Adam says.