Yahoo Finance Gen Z doing nothing to buy a house, but think they'll have one
Young Australians have "blind optimism" that they would one day own a home, despite many prioritising their finances for other items, such as travel, education and career.
A new study by the Australian Housing and Urban Research Institute (AHURI) found that, among 18 to 24-year-old Australians, 32 per cent thought they could buy a home in five years, while 36 per cent could do so in five to 10 years.
"We found that many emerging adults had a ‘blind optimism’ that they would be able to achieve their housing aspirations despite not actively planning for their housing future," said report author Dr Sharon Parkinson of Swinburne University.
Australians in that age group were prioritising study and travel – and starting a secure career – rather than saving for a deposit for a home purchase.
To achieve all this, young people have been forced to stay in their parents' homes for longer, with 66 per cent doing so in 2015-16. This was up from 58 per cent back in 2003-04.
"By 2015-16, only 17 per cent of emerging adults were living in an independent household," said the report.
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Reality check as those young people get older
In the next age bracket, 25 to 34 years, the optimism for home ownership was jolted by a reality check.
That age group realised tertiary education and higher income would make a big difference in their ability to secure housing. Sixty-one per cent of those that went to university thought they'd buy a home within five years, while only 36 per cent believed the same among those who finished year 12 or below, and just 23 per cent for those that completed year 11 or below.
Despite the cooling off of the housing market in the past 18 months, the average Sydney price remains at $866,524 and $709,092 in Melbourne.
The report called for policy makers to assist younger generations to have access to secure housing close to opportunities for study and work.
"This includes development of regional hubs and precincts of economic activity attracting investment, industry and education, alongside a mix of affordable and market housing.
"Provide individually tailored funding for educational, employment and housing packages targeted to young adults leaving school who have limited or poor access to further training and employment opportunities when living within the family home. This includes dedicated initiatives for young Indigenous Australians living in remote and regional areas."
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