Homeownership among young people drops in Australia

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The dream of homeownership is slipping further away for younger generations, the latest report card on Australia's wellbeing confirms.

Homeownership among young Australians has fallen by more than one-third in the last 25 years.

Despite an increase in Australia's disposable income, the rise in house prices has eclipsed those benefits.

According to the latest Australian Institute of Health and Welfare report, the country's net disposable income increased by 1.9 per cent per capita every year over the past three decades, while house prices have risen by more than 7 per cent per year.

"Look there's no doubt that if you look at over the last 25 years or more homeownership has been under great pressure," Assistant Minister for Social Services Zed Seselja said at the Parliament House launch of the report on Thursday.

"We've seen young people entering the market later, we've seen the number of people in that 25-34 cohort owning their homes less often."

Melbourne real estate agent Ed Tombs at a property inspection in the city's inner west.
Melbourne real estate agent Ed Tombs at a property inspection in the city's inner west.
SBS

At a Melbourne home inspection on Thursday, prospective buyer Cameron Wickens questioned whether his two children would ever be able to afford a home.

"I can't really see them ever being able to afford to buy a house outright," he told SBS World News.

"I think the Australian dream of being able to buy your own property and pay it off is just about gone for the average person, these days.

"The percentage of what people earn as opposed to what they pay for a house - it's just not balanced anymore."

The report shows home ownership among young Australians has plummeted.

Between 1988 and 1989, 60 per cent of 25 to 34-year-olds owned a home, but that fell to just under 40 per cent in 2013-14.

Between 1994 and 1995, 42 per cent of people owned their home outright, but that dropped to just over 30 per cent in 2013-14.

Melbourne real estate agent Ed Tombs says he does not see the market cooling off any time soon.

"As soon as it seems like it's cooling or plateauing we'll get a record result, so it would be a nice to know exactly when it would cool, but at the moment I don't see any signs of it slowing," he said.

The report also shows the government is spending almost $1,000 more on welfare per person than it was 10 years ago - a total increase of $40 billion.

It is also a grim picture among Indigenous communities.

Indigenous people are seven times more likely to live in social housing, less than half as likely to own their own home and more than twice as likely to rent.

First Home Buyers Australia is an organisation that helps those taking their first steps onto the property ladder.

Spokesperson Taj Singh says entry-level houses have increased in price.

"Over the past two years, we've seen the housing affordability crisis get worse, particularly in entry-level homes where people were buying around the $500,000 mark, and now they're looking up to the $700,000 mark," he said.

Increasing rental prices are also exacerbating efforts to save for a house deposit.

Between 1994 and 1995, 18 per cent of people were renting, but 20 years on that figure has risen to 26 per cent with renters experiencing an average $144 increase in housing costs.

While the government says it is working on solutions for first-home buyers, such as land release and its superannuation proposal, there seems to be little impact on the housing market yet.

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