Growing up in Australia, I’ve always just assumed I’d buy a house one day. You’ll grow up, get a decent job and after a few years of figuring yourself out (read as: living off goon and mi goreng), you eventually settle down and buy a nice house in the burbs. My dad owns a house – though he still owes the bank a lot of money – and so does my mum. Surely when I become a proper adult I’ll be able to buy a house too?
Unfortunately, that’s probably not the case, at least according to financial planner Michael Abrahamsson. In an interview with VICE, he said:
“30 years ago someone your age could buy a nice house in a reasonable suburb on one income. Try naming a place where you actually want to live where you can do that now.”
He went on to say that if you’re a young person in Sydney or Melbourne, even if you have a fairly decent job, you’ll most likely never be able to afford a house in the city.
I thought maybe this was just one guy’s opinion, but last week evidence was released which proves that young people are struggling to afford housing and may have to rent forever. The report is called the Household, Income and Labour Dynamics Survey and it’s a longitudinal study that has been running since 2001.
The report reveals that home ownership among Gen Y – or peeps between 25 and 34 – is in pretty steep decline. In 2002, almost 39% of Gen Y owned houses. In 2014, that figure dropped to 29.2 per cent, with most of the decline happening in the last 4 years.
Not only that, the report reveals that Baby Boomers are the richest faction of society. People aged 65 and over are the wealthiest, while 45 to 54-year-olds have the largest share of investment properties. Generally, while young people are struggling to buy a single house, older people are accumulating multiple properties.
“An implication of this finding is that housing at the ‘affordable’ end of the distribution appears to have become relatively less affordable between 2001 and 2014,” the report states.
So unless you’re in a position where you’re likely to get a nice chunk of inheritance, the property looks pretty grim for young folks.
On the plus side, at least we’ve got some solid arguments to use against the old folks when they accuse us of being lazy and entitled. No doubt the older generations worked hard for their wealth but we work hard too. And despite this, we are trapped in an economy with fewer opportunities than our parents and grandparents.