Home ownership is a much-revered Australian milestone, a marker of adulthood independence and a key to economic security. However, today, the big Australian dream of owning a house in your 20s is not for all.
I used to look at soaring house prices in blinking horror; now, I don’t look. Even lockdown couldn’t slow the pace. Dwelling prices continued to skyrocket beyond our reach, further dimming the home aspirations of young Australians.
Home ownership rates have been plummeting since the 1980s in a nation that used to boast of being an egalitarian society. With the intergenerational shrinkage of stable income and a spike in debt-to-income ratio, young people and those with a modest income have been gradually locked out of the real estate market.
Consequently, many young adults are sharing rental homes or boomeranging to parental homes out of economic necessity. Home ownership is increasingly becoming hereditary; something that used to be attained is more likely to be inherited by those who come from money.
A global pandemic exacerbated matters. With closed borders and strict lockdowns, the concept of ‘home’ stretched to include work, school and all other aspects of society. The increasing significance of a well-spaced house provided a boost to an already upward-surging property market.
As a result, more of us are renting in droves and heavily sighing at the diminished prospect of ever owning a house. Perhaps a few years ago there was a time when the “stop buying smashed avocado for $19 and four coffees at $4 each” advice would inch a young person closer to a house deposit. Now, it will take us more years of sacrifice for that advice to be fruitful.
Notably though, not every young person can afford avocado toast in a hipster café.
The housing affordability crisis is mostly causing housing stress among low-income-earning youth – the real losers. High housing costs such as rent payments limit spending on other essentials – food, health care and education – and take away disposable income from many aspects of wellbeing.
But what’s causing the real estate frenzy?
Last year, house prices rose by a whopping 24% in some parts of the country.
There are multiple reasons why. First, easy borrowing and low interest or mortgage rates in a limited supply market have produced a very high demand for dwellings.
Second, investment incentives such as …….
