Young Australians are rewriting the rulebook on property, with parent equity and rentvesting now front and centre as practical strategies to break into the market.
How parent equity is helping more young Aussies in the door
As property prices hit record highs, many first home buyers are calling on the ‘Bank of Mum and Dad’. But not just for a handout.
Parent equity loans allow a family member to guarantee part of the deposit by using the equity in their own home by removing (or at least slashing) the need for a big cash deposit and often eliminating lenders’ mortgage insurance (LMI).
In some cases, lenders may allow borrowers to access up to 100% of a property’s value if supported by a parental guarantee. This depends on lender policies and eligibility.
Guarantees can cover up to 20% of the loan, enabling buyers to jump in sooner and possibly even borrow a little more to cover costs such as renovations or furniture.
But it’s not all easy sailing
Parents take on the risk because their own property is on the line if repayments wobble. So it’s essential to consider everyone’s circumstances and have a grown up chat about contingencies and exit strategies.
Rentvesting is becoming an increasingly popular strategy among young Australians.
Rentvesting is when one rents in one suburb while buying in another. This has exploded as a workaround for young Aussies who want to live in lifestyle rich areas but can’t afford to buy there just yet.
The logic…
Buy an investment property in a growth suburb that’s affordable, rent it out and use the income and tax advantages to repay the loan, all while building equity through property to increase your financial position and keeping lifestyle options open.
Over half of property investment purchases in the past year were made by Millennials or Gen Z – more than half of first home buyers say they would consider rentvesting in 2026.
The strategy is laser focused on numbers, not nostalgia, with rentvestors targeting suburbs with better long term growth while enjoying the perks (and smashed avo) of renting where they want to live.
It also provides flexibility for job changes or travel rather than being anchored to one postcode for life.
Pairing parent equity and rentvesting
A growing number of young buyers are combining these two strategies:
- using parent equity to unlock lending and
- snap up an investment property, then renting in a spot that suits their career or lifestyle.
It’s a practical and popular move. But please note: not all lenders will offer family guarantees for investment lending.
With tight vacancy rates, surging rents and more government schemes set to support entry to the market, these creative approaches are only going to gain steam in 2026.
If ‘ownership on your own terms’ is the 2026 property mantra, it’s young Aussies and their families leading the charge.