While many Baby Boomers and Generation Xers may think Millennials have it easier than they did, a new report has found it might not be the case – as it revealed younger people today are much less likely to own a house with each passing generation.
It was once the norm to buy your first house in your early 20s, but fewer people are achieving the Australian dream now. For years, we’ve been hearing that property prices in Australia are outstripping the cost of living – and the case only seems to be worsening.
The report by the government’s Australian Institute of Health and Welfare (AIWH), released on Wednesday, revealed finding affordable housing remains a challenge for many Australians, with more people spending a higher proportion of their incomes on housing than in the past and fewer younger people owning their own homes.
In fact, the report found 50 per cent of Australians aged between 30 to 34 own their home, down from 64 per cent in 1971, while 37 per cent of people aged between 25 to 29 own their home, down from 50 per cent in 1971.
Meanwhile, two-thirds (67 per cent) of people owned a home in 2016, down slightly from 68 per cent in 2011. While the home ownership rate remained around 67 to 70 per cent from the mid-1960s.
Home ownership rates have also decreased among people nearing retirement – since 1996 home ownership rates have gradually declined. Meanwhile, the report also found more people are renting – especially younger age groups – with 54 per cent of those aged under 35 years choosing to rent in 2016, compared to just 47 per cent in 2006.
“More than 1 million low-income households were in housing stress in 2017-18, where they spent more than 30 per cent of their income on rent or mortgage repayments,” AIHW spokesperson Mr. Dinesh Indraharan said in a statement.
Meanwhile, speaking on Sunrise this morning about the shocking report, Alan Jones said: “The difficulty is the price of homes has increased beyond the increase in wages, that’s the first thing, and homes are now beyond the reach for many.
“The second thing young people used to be able to get into a home more readily than today. They’ve got debts hanging over their head and those debts have got to be discharged.
He continued: “Then of course we’ve got a banking royal commission and the banks are being very very difficult… They are wanting a 20 per cent deposit. You know on a $500,000 house… that’s [a] $100,000 [deposit], I mean no person can save [that amount], pay rent and pay off your Hecs debt.”
A new report suggests the great Aussie dream of owning a home is fading with each generation. pic.twitter.com/BtocDSZdg3
— Sunrise (@sunriseon7) September 10, 2019
And while many Aussies are struggling to remain housed, a shock one in four people are currently experiencing an episode of loneliness, particularly those who live alone, young adults, males and people with children.
“There are many factors that can contribute to loneliness,” Indraharan added, according to an ABC report. “It could be to do with our existing social networks, our access to support services as well as our day-to-day lives, for example whether we have employment, or sufficient housing.”
Meanwhile, it comes after a previous study by the Federal Reserve found that Millennials (people born between 1981 and 1997) have lower real incomes than members of Generation X (born between 1965 and 1980) and the Boomer generation (born between 1946 and 1964). And while Millennials have household debts similar to those of Gen X when they were younger, they actually have more than Baby Boomers did at that age.
Important information: The information provided on this website is of a general nature and for information purposes only. It does not take into account your objectives, financial situation or needs. It is not financial product advice and must not be relied upon as such. Before making any financial decision you should determine whether the information is appropriate in terms of your particular circumstances and seek advice from an independent licensed financial services professional.