Latest data from the Bankwest Curtin Economics Centre Housing Affordability Report 2016 show that a vast majority—or 86 per cent—of Gen Y households living off rent or with their parents aspire to own a home. But although many of them are choosing to delay home ownership as a lifestyle choice, others are forced to delay due to lack of affordable housing options.
The deposit gap, which is around A$50,000, has been identified as the biggest barrier to home ownership. Among Gen Ys already in home ownership, 38 per cent reported that they received financial assistance from their parents or grandparents. Almost 60 per cent are unlikely to receive the benefit of intergenerational assistance, which has been proven to be crucial in entering home ownership.
In fact, Gen Y—also dubbed as ‘Generation Rent’—is becoming increasingly reliant on government incentives in order to help them put a leg up on the property ladder. Around 75 per cent of the respondents rated the First Home Owner Grant and stamp duty relief as being important in helping them to home ownership. Even the scrapped first home saver accounts scheme was viewed as important.
Government-backed low-deposit loans like Keystart in Western Australia and Homestart in South Australia have made a difference to thousands of households with low to moderate incomes. If implemented in other states, this could become a good solution to housing affordability. Shared ownership products can also be used, as well as discounted home ownership.
But ultimately the only long-term solution is to change the imbalance between incomes and house prices to improve the home ownership prospects of young Aussies.
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