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Bouris: Housing crisis has ‘no solution’

EXCLUSIVE: Young people cannot afford to buy a home in parts of Australia and it would be “crazy” to try and find a solution, according to home loans entrepreneur Mark Bouris.

Speaking to Yahoo7 Finance, the executive chairman of wealth management firm Yellow Brick Road said there has been an profound shift in the Australian home ownership landscape. 

“If people are under 30, they probably can’t afford to own their home, especially in Sydney,” Bouris said.

“There is no solution as it’s a structural matter. You would be crazy to try and create a solution around that.”

With population growth fueling housing demand, but modest annual wage increases, the Australian dream of home ownership has become more difficult to obtain.

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Bouris, who made his fortune selling Wizard Home Loans to GE Money for $500 million in 2004, said most people under 30 have accepted they are part of the “renting generation” for now.

“These people will buy houses at a later stage of life, so they might not get something until they are 40,” Bouris said.

“The reason people under 30 were able to buy houses previously was that house prices allowed you to save from the age of 18 to 30.

Also read: Aussie housing affordability on world scale

“Now it takes longer and you have to save from 18 to 40. They will just have to wait longer.”

However, Bouris said Australia’s housing affordability situation has simply bought the country in line with other major global cities.

“First home buyers are not getting housing in London, Paris, New York or Moscow. They are big cities and somewhere like Sydney is a big city too.

“So first home buyers are out of the market for a while,” he said.

Also read: Yellow Brick Road lifts earnings

Bouris said a continuing rise in house prices would hinge on where jobs are available.

“If the jobs are available in Sydney, house prices will continue to go up.

“Overall, house prices are likely to keep rising steadily, but not at 10 per cent, more like a couple of per cent each year.”