Escalating property prices are pushing Australian adults out of the property market, with research showing that fewer than 50 per cent Australian adults are expected to own their own property in the next few years.
The Melbourne Institute’s Household, Income and Labour Dynamics in Australia (HILDA) report has found that as house prices are going up, home ownership rates are declining.
Between 2001 and 2014, the proportion of owner-occupied houses has fallen by 3.5 per cent, according to the report.
The report’s author, Professor Roger Wilkins, said: “That translates to 700,000 Australian homes. It is likely that in the next few years fewer than half of adults will be home-owners.”
Mr Wilkins believes that the fall in home ownership is due to high house prices, as opposed to less interest in owning a home.
Perhaps unsurprisingly, the biggest declines in home ownerships were seen amongst younger Australians.
The report showed that home ownership among those aged 25-34 years fell from 38.7 per cent in 2002 to 29.2 per cent in 2014. Much of this decline was seen from 2010 to 2014.
Older Australians also recorded a decline in home ownership, although it wasn’t as pronounced as the 25-24 age group.
Home ownership fell from 63.2 per cent to 52.4 per cent for those aged 35-44, and went from 75.6 per cent to 67.4 per cent for those aged 45–54.
Those aged 55–64 only saw a slight decline in home ownership, from 75.1 per cent in 2002 to 72.9 per cent in 2014.
There was essentially no change in home ownership among those aged 65 and over.
While it may be getting harder for young Australians to enter the property market, they shouldn’t let this report deter them from pursuing their dream of home ownership.
There are still many avenues of getting into the property market, they may just take some compromises or thinking outside the box.
Visit this blog again on Wednesday for some suggestions on how to break into the property market sooner.