Homeownership has become near impossible for most Australians as new data shows that it would take the average person about a decade to save for a deposit.
The 2024 Helia Home Buyer Sentiment Report found it would take 14 years to save up for the traditional 20 per cent deposit for a home in Sydney and nine years for a home in Melbourne, Brisbane and Canberra.
In Adelaide and Perth, it would take eight years. In Hobart, it would take seven years and in Darwin, it would take six years.
”The size of the deposit is huge so that task is almost insurmountable for a number of people. Just that sheer length of time is a barrier in and of itself,” University of Sydney senior urbanism lecturer Laurence Troy said.
“If you find yourself in a private rental paying the very high rents we have now and also trying to save, that just becomes an impossible task.”
It comes as house prices inch out of reach with the average price of a home in Australia rising to $973,000 in June, according to the Australian Bureau of Statistics (ABS).
“As prices have been escalating quite significantly, the challenge just gets further and further in front of you and you can’t actually keep up with the pace of change,” Troy said.
Troy said some have given up while others are waiting to inherit their parents home.
”There are some people that we’ve spoke to that have decided, or acknowledged, that they won’t be able to achieve homeownership during their working lives and their parents aren’t in a position to support them to get homeownership,” he said.
Meanwhile, others are consequently filling in the gap by turning to their family for support to keep up with ballooning prices.
The report found 42 per cent of adults under the age of 29 are living with their parents to save for a home, compared to 37 per cent the previous year.
Another 11 per cent are pooling with friends and family to buy a home and 16 per cent are turning to the bank of mum and dad.
“I’ve had people buying with friends and co-borrowing with family, sisters and brothers co-borrowing, pooling their money together,” Mortgage Choice broker Ben Williams said.
Troy said the average Australian can’t achieve homeownership without family support.
“There are possibilities in other cities if you can make some tradeoffs and find yourself in cheaper housing markets on the fringe but in Sydney, those tradeoffs don’t exist anymore,” he said.
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The future for generation rent
The term refers to young Australians who are forced to rent because they have been shut out from homeownership or have had to wait longer to purchase a home.
“They won’t find homeownership unless families can help them out along the way,” Troy said.
“All these wider structural changes in housing, labor markets and wealth inequality has meant there’s people that just can’t achieve it and often we call them generation rent.”
Troy said those within generation rent could face a lifetime of rental housing which can impact wealth into retirement.
“If you’re not in home ownership when you retire, you will face problems because your income is fixed, is relatively low and you just can’t afford rents in capital cities. People find themselves pushed into fringe areas or regional areas,” he said.
“There is a kind of wealth inequality and it creates poverty in older generations.”
Despite the dire future outlook for many young people, the generation appear eager to break into the housing market.
“It might not be today but people are still keen. This is what people want to do. You know, that’s the dream,” Williams said.
“The conversations haven’t stopped.”
