Young Australians amid soaring property prices are increasingly turning towards the stock market for investment, according to economist Tom Piotrowski. The current housing market has made home ownership elusive for many under the age of 40, prompting this demographic to seek alternative avenues for wealth-building.
Piotrowski highlights the difficulties in entering the property market, which have made shares a more appealing option due to the relative ease of investing. He notes that investing in shares provides a clearer, incremental path to wealth without requiring a substantial deposit.
This year marks the 30th anniversary of CommSec, the Commonwealth Bank’s online share trading platform, which has transformed investment practices since its inception in 1995. In the past, the process was cumbersome and mainly catered to older, wealthier investors. Today, technology enables younger individuals to trade shares via their smartphones, often funded by inheritance or disposable income. Reports from Finder indicate that the average amount invested in shares by Australians stands at approximately $24,020.
As wealth transitions occur from the baby boomer generation to younger Australians, there is a growing interest in stock market investing. Some may receive financial support for their first property, while others leverage newfound accessibility to the share market to grow their wealth. Piotrowski observes a notable increase in younger investors on CommSec, with those under 40 now accounting for nearly 40% of users—compared to just over 25% in 2020. Furthermore, female investors have nearly tripled over the past five years, a growth attributed to increased online financial literacy and engagement since the COVID-19 pandemic.
Piotrowski attributes this shift to technological advancements and social media’s role in demystifying stock trading for a broad audience. This change has made investing more mainstream than ever before. Notably, recent trading spikes were linked to significant global events, like changes in U.S. tariffs, although Piotrowski reassures that long-term investors tend to weather such market volatility.
He emphasises that while fluctuations in the market can be daunting, maintaining a long-term perspective is essential to mitigating risks associated with investment volatility.
In summary, young micro-investors are pivoting to the stock market as a strategic move against the backdrop of an inaccessible property landscape, fuelled by technology, shifting wealth dynamics, and an increasing commitment to financial literacy.