Yahoo Finance Grim property solution facing millions of Aussies
A young Aussie says it will take his “parents dying” for him to become a homeowner.
A young Aussie has shared the “great unspoken” property solution for millions hoping to get onto the property ladder.
Xavier George is one of many young people feeling frustrated about the current housing market.
Speaking on SBS’s Insight this week, the 30-year-old was asked what he thought it would take to become a homeowner. And he had a grim response.
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“My parents dying, I think,” he said.
“I think that is really the great unspoken [thing]. The ‘Bank of Mum and Dad’ doesn’t always cash out. Knock on wood. Sorry, Mum. But that’s the windfall.
“I’m serious about that. That is the great tidemark of when a lot of people are going to be able to suddenly buy their own home.”
George, who is currently paying off a $100,000 HECS debt, said he had done everything he was “supposed” to do but still didn’t know how he’d be able to afford a home.
‘That is the reality’
Thomas Walker, lead economist at Think Forward, recently purchased an off-the-plan apartment in Melbourne and said he was only able to do so because of his mother’s passing.
“I’m 34 and I’ve been renting for 15 years and I would say I probably wouldn’t have bought a place until my late 30s, except for that my mum passed away,” Walker told Yahoo Finance.
“She had a house, which we sold and split between me and my two siblings. That enabled the three of us to have a 20 per cent deposit.”
Walker said his situation was quite typical of other young people. He and his partner both work full-time with good incomes, but he said it would have taken years to save up a deposit.
“That is the reality unfortunately. Data that came out earlier in the year from the Australian Housing Monitor found two in three prospective homebuyers believe the only way they are going to afford a house is if they get an inheritance from their parents,” he said.
Baby Boomers were now the wealthiest generation in Australia’s history, Walker said, mainly thanks to the property market boom and the government’s encouragement of property investment through negative gearing and capital gains concessions.
“There is an enormous amount of wealth in property and that is going to be handed down in the coming decades to younger generations. The problem with that, though, is it is going to turbocharge inequality between generations.”
‘Not a lot of hope’
National Union of Students president Bailey Riley is currently renting in Sydney’s inner-west. She said home ownership felt “out of reach” for her and others saddled with student debt.
“I wouldn’t be surprised if I am not able to buy a home until I am in my 40s, and I think that’s the sentiment for a lot of students, especially with HECS loans,” the 23-year-old told Yahoo Finance.
Riley, who is studying social and political science at UTS, currently has $18,000 in HECS debt and estimates it will grow to $30,000 by the time she graduates.
“The price of homes is just so out of reach for most people, especially if you live in cities or metro areas,” she said.
“Even looking at apartments is still so expensive and there is not a lot of hope in that area for young people at the moment. It’s pretty scary.”
‘Growing chasm’
Walker said many of the government’s initiatives, including first-home buyer grants, put upward pressure on housing prices and did not address the root issues.
“In the ‘60s and ‘70s, the Australian government had a really big focus on high home-ownership rates, and the government would build housing to sell to first-home buyers at a discount, to encourage home ownership,” he said.
“We’ve dismantled that system in favour of one that is driven by private property investment as a wealth-generating tool, which has been good for the wealth of the country for a portion of the population, but now there is this growing chasm where young people are unable to jump into property.”
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