Posted: 23 September, 2016
Things Are Looking Even Worse For Young Aussies Wanting To Buy A Home
“We are a nation that can no longer house its own children”
Young Australians are finding it even more difficult to crack the property market, with shadow treasurer Chris Bowen warning that Australia is becoming a nation that can no longer house its children.
High property prices are preventing young Australians from purchasing their own homes, with overall homeownership at a 60-year low. Only 42 per cent of those aged 25 to 34 owned their own home in 2012, a significant drop from 1982’s home ownership rate of 62 per cent.
“This is not surprising given that over the last 25 years young people have gone from having to pay just five times, to now having to pay up to 15 times their annual income to purchase a new home,” Mr Bowen said in an address to the McKell Institute.
“(The fact that) young people (are) unable to crack into the housing market strips them of one of the most fundamental wealth drivers through their lifetime.
“No wonder the Grattan Institute has shown that falling home ownership rates for young people mean they now have less wealth than people of the same age eight years before.”
And while a future housing crisis has been predicted before, Mr Bown indicated that it had already arrived.
“We are a nation that can no longer house its own children,” he said.
“It is not good enough for governments to shrug their shoulders and say ‘Well, that’s the market in operation’. There are few areas of our economy more a feature of government policy settings than housing. And those settings are working against middle income earners with an aspiration to own their own home.”
Mr Bowen argued that the current negative gearing system gave investors an unfair advantage over first home buyers. Under Labor negative gearing would be limited to new properties.