Buying a Home in Your 20s: It’s Not Getting Easier, Says Millie Muroi

Buying a home in your 20s is becoming increasingly challenging for young Australians. Despite efforts by some to enter the housing market, affordability issues raise serious concerns.

The Current State of Housing Affordability in Australia

A recent report highlights the struggles of younger generations trying to achieve home ownership. Millie Muroi, an economics writer, notes that while Millennials and younger generations are entering the market, they face significant hurdles.

Rising House Prices and Debt Levels

• The average loan for owner-occupiers has surged to over $700,000 from $512,000 in just five years.
• Housing prices now average eight times the median income, with cities like Sydney showing even higher multiples.

As housing prices soar, the average household now needs nearly 11 years to save a 20% deposit. The burden of debt associated with home ownership continues to grow.

Generational Trends in Home Ownership

The Australian Institute of Health and Welfare reported that while younger generations are entering the housing market later, they are progressively catching up to their predecessors. Nonetheless, ownership rates among the oldest Baby Boomers remain unmatched.

• Those born from 1977 to 1986 saw gradual improvements in home ownership rates.
• However, the trend does not suggest that obtaining a home has become easier, as income growth has not kept pace with inflation.

The Role of Financial Assistance

A crucial factor enabling some young Australians to purchase homes is financial support from family. Many are benefiting from inheritances or assistance in managing down payments. This trend raises concerns about wealth inequality.

According to ACOSS, the wealth gap among younger households is growing. The wealthiest 10% have increased their assets by 126%, while the bottom 60% saw only a 39% rise from 2002 to 2022.

Looking Ahead: The Human Cost of Housing Affordability

The ongoing crisis in housing affordability has broader implications. High housing costs exert financial stress on households, impacting health, productivity, and overall stability in society.

Ensuring fair access to home ownership should be a goal for all generations. The current dynamics raise questions about the socioeconomic divides caused by the housing market, challenging the notion that home ownership should be attainable for everyone.