Young Australians used to dream about finishing their studies, and buying their own home, yet this dream keeps moving further out of reach. What once was considered by many as a rite of passage, now seems to be a far away dream for many young Australians. A limited supply of affordable rental housing, alongside increasing housing prices with wages that aren’t rising at the speed needed to be able to afford this increase is pushing young Australians out of the housing market. We looked into why this may be the case.
Australia’s housing crisis has been a problem for decades, and with no real signs of disappearing, young people are barely able to rent a property, let alone be able to buy one. Caleb Oswald, a university student, spoke about his experience renting in the current climate. Although his rent is $2500 a month between three people, Oswald states that he’s “just been lucky” to even be accepted to lease the house, even though he also said the house “has a number of service issues”. Oswald expressed concern over his friends in other situations, and believes that this problem is only worsening for the upcoming generation who wish to buy property. Caleb Oswald only provides a small glance into the competitive and expensive nature of the property market at the moment, and he gives some insight into why so many young renters and want-to-be buyers are struggling.
A reason that this may be the case is because of government policies such as the “First Home Buyer’s Grant”, negative gearing and discounts on capital gains tax. These have all played an important role in creating the climate of the housing market, which has unfortunately been to the detriment of young Australians. A major downfall in the Australian housing market could be when Kevin Rudd introduced increased incentives for homebuyers after the Global Financial Crisis. During this time, buyers of pre-existing homes were offered an extra $14,000, whilst those purchasing newer builds were offered up to $21,000. Although this had short term benefits, this led to national property prices reaching record level highs which have only continued to rise since. The long term impact of this has created more harm than good, with first home buyership at only 12% last year. This figure further explains just how difficult it has been for Australians to buy their first homes and break into the property market.
Toby, a real estate agent who works with Nelson Alexander explained that there are houses available to buy but that “it’s maybe just a little bit more difficult because the product they want in a particular area is scarce”. However this doesn’t truly explain, nor does it give an answer to the question of why young Australians are struggling to enter the property market.
For younger generations, their hope to eventually buy a house is heavily reliant on the current government, and future governments to change policies and somehow fix the economic climate, however this hope remains low for many.
