Analysis of the latest Census data by the Grattan Institute has revealed that increasingly home ownership is no longer part of the Australian Dream for younger people.
Home ownership levels have declined at all ages between 25 and 64 since 1981, according to John Daley of the Grattan Institute, with 25 to 34-year-olds hardest hit by the declines.
Home ownership rates are down 6% overall in the last decade for younger Australians, while in contrast, Baby Boomers aged 65 and over saw a dramatic jump in ownership levels over the last five years to the highest levels since 1991.
Home ownership rates fell 7% over the past decade for 35 to 44-year-olds and Daley says that rapidly rising house prices mean that most people in that age group won’t be able to buy a home in the future.
“Those who didn’t (or couldn’t) afford to buy over the past decade by their mid 30s are unlikely to purchase a home now,” he said.
Daley says that lower income earners have been hardest hit by the trend.
He rejects arguments that the slower take up of housing ownership is the result of people having long-term relationships and families later in life.
“The steep decline in home ownership rates among poorer households in each age group shows worsening housing affordability is the real culprit,” he said.
“Among 25 to 34 year olds, home ownership rates for those in the bottom income quintile are down over 30% since 1981. But those in the top income quintile of 25-34 year olds are almost as likely to own a home as they were 30 years ago.”
He also sees problems for Gen Xers because of the buffer home ownership provides for a comfortable retirement.
“This is a big issue given declining rates of home ownership among 45-54 year olds — down 6% as well since 2006,” he said.
“They’ll have missed out on the big windfall gains that have come from rising house prices over the past decade, and they miss out on the enforced savings vehicle of a mortgage.
“The evidence shows that renting seniors are much more likely to experience financial stress in old age – and while working.”
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