- Millenials, more than any other generation, want to get into the property market but increasingly they’re unable, according to the latest CoreLogic survey, as national house prices have rocketed up.
- In fact, the proportion of millennials that say they won’t be able to buy a home until they’re into their 30s has almost doubled in just two years, from 20% in 2017 to 34% today.
- That’s put Australia in a position where “we risk entrenching a generation who become disenfranchised from society,” CoreLogic CEO Lis Claes warned, urging policymakers to implement serious reforms to arrest the trend.
Despite still desperately wanting to own a house, millennials have all but given up on the prospect until they’re in their 30s.
That’s the takeaway from the most recent survey by property researcher CoreLogic which found that the proportion of millennials priced out in their 20s had risen from 20% to 34% in the last two years – that’s despite orderly declines in the most expensive markets Sydney and Melbourne.
“Of all the generations, millennials were the most likely to rate homeownership as important– 86% rated homeownership as important. That’s despite millennials confronting the biggest challenges of affordability,” CEO Lisa Claes said at an event in Sydney unveiling the report.
“If millennials’ affordability disillusionment continues, we risk entrenching a generation who become disenfranchised from society. It raises serious issues around intergenerational equity and should be a catalyst for policymakers to address affordability at a foundational level,” Claes said.
Nationwide, less than four in ten millennials reckon they’ll be able to afford to buy before their 30s. While that number is lower in capital cities like Sydney and Melbourne, affordability has taken the most serious battering in smaller markets in the last 12 months. Tasmania was the only state where affordability has gotten worse over the last year, while the ACT also worsened.
But while being priced out, millennials significantly they haven’t lost their desire to do so.
“Millennials haven’t given up on the great Australian dream – they want to own homes. In fact, by being denied it, they want it even more but they are losing hope that they will ever be able to realise that dream,” head of research Tim Lawless said.
With the Reserve Bank of Australia (RBA) having already cut interest rates twice, and adjustments made to free up the flow of credit into the market, those prices are again rising. millennials may be unable to control those forces but they are exploring alternatives to find ther way into the market.
Of those surveyed, 11% of non-homeowners indicating they would definitely use ‘rent-vesting’ -– a practice where they buy an investment property they can afford first while they themselves continue renting – to get into the market. Another quarter stated they would consider it.
Notably, despite enthusiasm for rent-vesting, only 4% said they actually owned a property.
Assessing the situation, CoreLogic urged the government to actually address the affordability problem.
“We need to see much more strategy to address housing affordability and not just band-aid solutions. That means not grants or concessions, but real long-term fixes for affordability. I think that’s the key message to come out of our research,” Lawless said.