September 28th 2024.
The dream of owning a home has become increasingly out of reach for most Australians, as recent data has revealed that the average person would need a decade to save up for a deposit. The 2024 Helia Home Buyer Sentiment Report has found that in major cities like Sydney and Melbourne, it would take even longer - 14 and 9 years respectively - to save for the traditional 20% deposit. In other cities like Brisbane, Canberra, Adelaide, and Perth, it would still take a significant amount of time - between 6 to 8 years. This news has left many feeling disheartened and discouraged, as the sheer length of time it takes to save for a deposit seems almost insurmountable.
Laurence Troy, a senior urbanism lecturer at the University of Sydney, has highlighted the enormity of the task, stating that the size of the required deposit is a major hurdle for many. He explained that for those who are currently renting and trying to save, it becomes almost impossible to achieve homeownership. With the high rental prices we are seeing, it's a constant struggle to keep up with the rising cost of housing.
As if things weren't already challenging enough, the average price for a home in Australia has now reached $973,000, according to the Australian Bureau of Statistics. This means that as house prices continue to soar, the dream of owning a home seems to be getting further and further out of reach. Troy stated that some have already given up on the idea of ever owning a home, while others are counting on inheriting their parents' home as their only hope.
But for those who still hold onto the dream of homeownership, many are turning to their families for support. The report found that 42% of adults under the age of 29 are living with their parents, compared to 37% the previous year, in order to save for a home. Others are teaming up with friends and family to pool their resources, and some are relying on the help of their parents to make their dream a reality.
Ben Williams, a mortgage broker, has seen first-hand the creative ways in which young people are trying to navigate the challenging housing market. He shared stories of friends and family co-borrowing and pooling their money together to buy a home. However, Troy believes that without this kind of family support, the average Australian will struggle to achieve homeownership.
In fact, Troy believes that for many young people, homeownership may not be possible without the help of their families. He explained that in other cities, it may be possible to make some tradeoffs and find more affordable housing on the outskirts, but in Sydney, those tradeoffs are no longer an option. This has led to the rise of what is known as "generation rent" - young Australians who are unable to enter the housing market and are forced to rent for the foreseeable future.
Troy expressed concern for the long-term impact this could have on this generation, as rental housing does not offer the same level of wealth and stability as homeownership. He warned that those who are not able to own a home by the time they retire may face financial struggles, as their fixed income may not allow for expensive rental prices in major cities. This could lead to poverty and wealth inequality in older generations.
Despite the challenging housing market and the uncertain future for many young people, there is still a strong desire to achieve the dream of homeownership. Williams shared that despite the obstacles, many are still eager to make it a reality. The dream of owning a home may not be achievable today, but it is still a goal that many hold onto. The conversations surrounding homeownership have not stopped, and it remains a top priority for many.
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