Housing Affordability Crisis Plagues Australia’s Youth - Property Inc

Housing Affordability Crisis Plagues Australia’s Youth

In Australia, young people and middle-income earners have increasingly given up hope of ever owning their own home, according to new research. A survey conducted by Resolve Political Monitor for The Sydney Morning Herald found that 66% of the 1,609 respondents agreed that young Australians will never be able to buy a home. From those who do not currently own a home, 63% of low-income earners and 54% of middle-income earners believe they will never purchase their own property (Wood).

Housing affordability has become a significant issue in Australia, which is home to one of the world’s most expensive property markets. Resolve Director Jim Reed explains the dilemma facing younger Australians: “They are buggered if they do and buggered if they don’t. My researchers in this area tell me that many young people have simply given up on the dream of owning a home, at least in their early careers, and some are even telling me that they are giving up on having a family because they can’t afford to look after themselves, let alone more mouths” (Wood).

Furthermore, the rental market in Sydney remains under pressure, with available rentals falling nearly 20% over the past year (Killman). PropTrack’s Rental Report for March 2023 shows an 18.2% year-on-year decline in Sydney’s number of rental listings on realestate.com.au, while demand increased by 16.7% (Killman). Consequently, rents across the city have risen by 11.3%, and vacancy levels are at record lows, with less than 1.7% of rental properties vacant (Killman).

Cameron Kusher, PropTrack’s Director of Economic Research and report author, acknowledges the growing challenges for renters in Sydney: “It’s definitely getting tougher for people to rent in Sydney. What we have got is way too much demand and not enough supply” (Killman). Kusher points out that the high migration rates and people moving back to cities have increased competition for rentals, while higher interest rates have reduced borrowing capacities, making it harder for renters to become first-time homebuyers and more difficult for investors to purchase properties, restricting rental supply (Killman).

While housing affordability continues to be a major concern for young Australians, regional rental pressures are expected to ease as rental listings increase by 34.8% over the past year, and demand decreases (Killman). However, the ongoing challenges in the housing market may have lasting effects on the economy, impacting cities, governments, and the Australian way of life.

References:

Wood, Richard. “Most young Aussies giving up on home ownership, survey finds.” https://www.9news.com.au/national/housing-crisis-update-two-thirds-of-young-people-give-up-on-home-ownership/8b217180-75d2-4106-b49a-c25dac7c0678

Killman, Fiona. “Sydney’s rental crisis continues with fewer listings and higher demand.” https://www.realestate.com.au/news/sydneys-rental-crisis-continues-with-fewer-listings-and-higher-demand/

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