The amount of first time buyers taking out home loans has fallen to its lowest level in almost a decade.
Compared to 30 years ago, there’s now twice as many Australians renting, and for many Generation Y's now in their 20’s and 30’s, buying their own home will now seem almost unattainable.
Mark McCrindle joins Today Tonight on the topic of Generation Rent – outlining how difficult it is today for young people to break into the property market.
Today it is twice as hard for young people to buy their first property compared to when their parents were starting out, because they’re not just competing with other first home buyers but also with investors, self-managed super funds, trusts and overseas buyers.
Four decades ago, an average home in a capital city was 5 times the average annual earnings, and today it’s 10 times average annual earnings.
It’s not all bad news – in many areas, particularly in the inner city suburbs, it is much cheaper for young people to rent than buy, and as long as they’re investing and not spending everything on lifestyle pursuits, young people will get ahead even without home ownership.