Property bridges the generation gap

Generation Y, generation X and baby boomers all nominate property as their number one investment choice, an annual survey of do-it-yourself investors has found.

For all generations, if they were given an additional $500,000 to invest the largest slice of the pie would go into investment property, the research suggests.

Celsius Research surveyed 503 DIY investors across four demographics - generation Y (aged 18-29 years), generation X (aged 30-44 years), and baby boomers (aged 45-65 years) and retirees (65 years plus) - on behalf of online banking service RaboPlus.

All those surveyed had portfolios of $150,000 or more, which included superannuation and savings but excluded the family home – and all actively managed their own investments.

If given an additional $500,000 to invest, generation Y would put 36 per cent of the funds into investment property, generation X would allocate 37 per cent to bricks and mortar and baby boomers would set aside 25 per cent for property.

Shares were the nearest rival to property for generations Y and X (23 per cent and 26 per cent respectively), while for baby boomers shares and investment in a self-managed superannuation fund came equal second (20 per cent).

The survey also finds that younger investors are the most cashed up and the most hopeful of earning double-digit returns.

Investors across all demographics have moved towards a lower-risk approach to investment compared with last year, RaboPlus investments manager Tim Hewson says.

"The research clearly shows a significant pull-back in investor attitude to risk compared to last year's findings by all investors in their exposure to growth assets, especially investment property," Hewson says.

"But if given an additional $500,000 to invest, investment property would still be the preferred investment for all generations."

Generation Y investors reported feeling less enjoyment out of the investing process, and have become as cautious as the baby boomers, who have become significantly more conservative and risk-averse, the research finds.

It suggests that the older you are, the more realistic you've become about returns and the importance of building a suitable long-term investment portfolio.