Generation Y and Housing Affordability

Monday, October 24, 2016


As Australia’s leading social researchers, the senior research team at McCrindle are actively involved in media commentary. Last week our Principal, Mark McCrindle and Team Leader of Communications, Ashley McKenzie were featured in the media about Generation Y and their ability to access the housing market in Sydney.

Generation Y are today’s 22 – 36 year olds, and make up 22% of the Australian population (5.22 million). They also make up the largest cohort in the current workforce (34%). Gen Y’s are comprised of today’s parents, senior leaders, influencers, and increasingly wealth accumulators. With 1 in 3 being university educated (compared to 1 in 5 Baby Boomers), they have grown up in shifting times and are digital in nature, global in outlook and are living in accelerated demographic times.

While Generation Y are often accused of living a lavish lifestyle, which supposedly locks them out of the property market, it is important to remember that traditional expense categories such as food, transport, health and housing costs are higher for younger people today than that experienced by their parents at the same age. A generation ago the average house price was 5 times annual average earnings while today the average house price is 13 times the average annual full-time earnings.

Here is a quick snapshot of last week’s media coverage:


Housing Affordability Debate

"From the Baby Boomer perspective, they worked hard, they earned what they had but I can also see the Gen Y perspective. The reality is that it's a lot harder to buy a home, the costs have gone up. Gen Y do have to pay off the debt of their degree and there are new categories of spend; technology, internet and phone, costs that their parents didn’t have."  


Parental help becoming essential for young people trying to buy property

"Ms McKenzie, who works for social researcher Mark McCrindle, said borrowing from parents was becoming Sydney’s “new normal”. “Baby Boomers control about 50 per cent of the nation’s wealth so it makes sense young people look to their parents for help,” she said." 












For any media enquiries please email us at info@mccrindle.com.au, or call our offices on +61 2 8824 3422. To arrange a media interview or if you are a journalist and would like to receive our media updates, please email kim@mccrindle.com.au.

Income and wealth distribution by state

Monday, September 12, 2016

High wealth, high income

What are the high wealth, high income states? Western Australia is leading in terms of both income and wealth, with $133,224 and $952,500 respectively, which is well above the average household annual gross income of $107,276 and average household net worth of $809,900.

However, over the last year particularly, the impact of the mining slowdown has affected earnings and also wealth. The reliance on the mining sector and the fluctuation of income and wealth based on the fortunes of this one sector are highlighted in the fact that between 2012 and 2014, the household incomes of those in Western Australia rose by 21% which was almost double that seen in the leading east coast state of New South Wales, and the wealth in this 2 year period increased by 24%, again almost double on what we saw from the best performing east coast states.

Top performing states

New South Wales is the most consistent performer in wealth and income, and the only other state to have both income and wealth about the national average (12% on income and 13% on wealth). It has a stable economy, with the largest infrastructure investments in the nation, a broad base of industries and consequently solid forward forecasts.

The Northern Territory, like Western Australia has been fluctuating, and while it has average income above the national average, its wealth is below the national average. Queensland, while improving in both income and wealth is below the national average on both as well. And Victoria while seeing solid gains in both income and wealth, with wealth largely due to the housing market above the national average, its income has still not quite reached the national average.

Worst performing states

The worst performing states are Tasmania, with incomes 26% below the national income and wealth average, as well as South Australia which is 19% below the average household income and 20% below the national net wealth.

While household income gains have been low in some states (a total of 6% gain since 2012 in South Australia, Tasmania and the Australian Capital Territory over the last 2 years), at least all of the states have had an increase in incomes, but such has been the change in property prices and the rise in living costs, the Northern Territory, South Australia, Tasmania and the Australian Capital Territory have all seen a slight fall in average household wealth since 2012.

The New Australian Dream

Thursday, September 01, 2016


Owning your own four bedroom house on a decent block of land with a big backyard and outdoor swimming pool used to be the quintessential 'Great Australian Dream'. But with rising property prices and increased living costs, that dream is being redefined.

what is the Average Australian Profile?

The average full time annual income in Australia is $80,000, which is bumped up a bit because of high income earners. Even though we are living longer now than a generation ago, the average retirement age is little changed, at 61.5 years.

The cost of housing is up with average rent prices per week at $485/week and the average house price (capital city) is $765,730. In Melbourne it is well above this and in Sydney it is around $1 million. This is where the challenge is for Australians: 40 years ago the average house price was around 5 time’s average earnings and now you can see it is almost 10 times the average annual fulltime earnings.

Other than affordability, what else are Aussies looking for?

Lifestyle is key. People are opting to live in higher density areas for the sake of convenience and location- within close proximity to transport, restaurants – the café culture as it has been called. Our Urban Living Index shows a strong correlation between the most urban/densified suburbs and those with the highest liability ratings.

Australians are opting for a lifestyle of Minimalism - we are 'decluttering' our lives and putting more value on the intangibles like travel. Generation Y aren’t opting for a big home with garages to store all their stuff but more of a focus on the easy-livability of apartment living. Indeed many baby boomers are downsizing from their larger homes in the suburbs to this style of living too.

Renting, as opposed to buying, what some of the benefits?

The ability to change locations easily is well regarded – the average Australian renter stays just 1.8 years per home. Our research shows that 1 in 3 renters are actually 'choice renters' and they choose to rent for lifestyle reasons, not primarily for affordability reasons. These choice renters are twice more likely to be living in medium and high density housing than the average Australian and they are almost 10 years younger than the average Australian. The ability to upsize and downsize easily and the flexibility to travel for extended periods of time is a driver for them. ‘Rentvesting’ is also becoming a ‘thing’. This is where people choose to rent in an area they like, but buy somewhere more affordable and use this as an investment

Generation Y are struggling to attain the Great Australian Dream – are they going to be ok?

There is a challenge emerging of "generational inequity" as shown by this infographic:

Gen Y’s have the least wealth of the working generations and their proportion of Australia’s wealth is less than half their demographic share, while the Baby Boomers who are a quarter of the population, own more than half of Australia’s wealth. (More information on this topic can be found here)

This is why Gen Y is reinventing the Aussie Dream and while they do still like the idea of owning something of their own, it is not just the big home with the back yard in the suburbs. But many in this generation will be absolutely fine thanks to the massive intergenerational wealth transfer set to happen in the next 20 years as those aged over 65 transfer much of their total wealth of $2.5 trillion.

Australia’s Generations by Wealth and Income

Wednesday, June 01, 2016

This infographic is based on analysis of the ABS Household Income and Wealth data released in late 2015 and 2013. It gives a picture of how both income and wealth is distributed across the generations of households in Australia and how it has been changing.

Generation Y: High incomes, low wealth

While Generation Y aged 25 to 34 are income rich, earning in gross household terms $113,152 per annum, their net worth is modest, at $268,800. As they enter their mid-30’s, they are getting closer to their key earnings years however such has been the low wages growth over the last two years, their household incomes have only increased by $5,356, or 5% since 2013. While Gen Y households on average earn more per annum than the older Boomers aged 55-64 who are rapidly easing out of their full-time working roles, these Boomers managed income increases almost three times that of the younger generation over this period ($14,040). This 14% increase in annual household incomes came about because the older Boomers were reliant not on wages growth but investment income which has seen solid increases over the last two years.

Generation Stagnation

It is ironic, and unfortunate that the emerging generation of wealth accumulators, moving up the career ladder have seen far smaller income increases (amounts just keeping up with inflation) than the generations that are easing out of employment or having ceased employment. Indeed, the generation aged 65+ managed much higher income increases (16%) than the younger working age Gen Y’s.

Wealth compared across the generations

The generational financial inequities are even more pronounced when analysing net wealth by generational cohort. While Gen Y have a household net worth of $268,800, it is less than half that of the Gen Xers who are just a decade older. The highest net worth generation in Australia are the Boomers aged 55-64 who not only have a net wealth almost 5 times that of the generation of their children (Gen Y) but they still have a decade or more of earnings and wealth accumulating ahead of them.

The $1 million households

While Gen Y have seen a wealth increase of 9% since 2012 ($21,647), the mid 50’s Boomers have seen a 14% wealth increase ($153,335) with their wealth rising since 2012 from $1,086,365 to $1,239,700. Therefore, not only does the average Australian household aged over 55 have a net worth exceeding $1 million, but, due largely to rising property prices over the last few years, it is also seeing the fastest wealth increases. When the demographic size of each generation is compared against their corresponding economic share, the differences are stark. Australians aged 25 to 34 are equal in size to the Over 65’s at 3.6 million, or 15% of the total population of 24 million. However, the net wealth of Generation Y is well below this population share at just 7% of the national private wealth compared to the Builders generation who have a share of 26%, almost twice their demographic proportion.

The quarter who own more than half

In total the Baby Boomers (45 to 64) are a quarter of the population (25%) but own more than half of Australia’s national wealth (53%). Their economic footprint is twice as large as their demographic footprint. While the Gen Y’s have decades of wealth accumulating ahead of them which will grow their net worth footprint, it is unlikely that Australia will ever see the likes of today’s Boomers again where a quarter own more than half. The Boomers have been the beneficiaries of a near 50-year economic miracle, and they are unlikely to ease out of this accumulating any time soon.

The $3 trillion wealth transfer

But there is some hope for the emerging generations who have stagnated in wealth and have been priced out of property. The households of Australians aged 55+ currently own a combined $2.8 trillion and over the next two decades will pass on much of this. By the time they move from the growing to the spending side of this accumulation, it will have exceeded the $3 trillion level. Therefore, the decades ahead will see the biggest intergenerational wealth transfer in Australia’s history and many of the younger generations will be the main beneficiaries.

Welcome to our blog...

We have a passion for research that tells a story, that can be presented visually, that brings about change and improves organisations. And we hope these resources help you know the times.

Our Social Media Sites

Facebook | McCrindle Research Social Media YouTube | McCrindle Research Social Media Twitter | McCrindle Research Social Media Flickr | McCrindle Research Social Media Pinterest | McCrindle Research Social Media Google Plus | McCrindle Research Social Media LinkedIn | McCrindle Research Social Media Mark McCrindle Slideshare


Last 150 Articles


Tags

anzac social researcher shopping Kirsten Brewer education future report career 40 million events travelling Lower Hunter social researchers cartodb work from home future-proof retirement SMSF Northern Beaches census results Australian demographics sydneycity interactive pyrmont Australian Dream high density Love gen alpha apartments workshop housing affordability PSI wellbeing Wodonga hopes public speaker rain business internship emerging technologies communications celebration volunteer motivate 2017 optus hornsby middle class demographic trends Hunter Valley Real Estate unemployment the average aussie unaffordable Sydney baby names cica NBRS Architecture wealth inequality urban brand statistics forecast collaborative ashley mckenzie census 2016 belief professional population jobs micro data analyst speajer sustainable census data insight mentor ethnography collaboration land of the middle class norwest finance food sector wide Australia street office opening entrepreneurs of today cancelling event ACF 2016 moderators guide list tea storytelling states brand experience Financial Planning Week tv youth NEETs Australian Communities Trends 2020 poker master google global small business breakfast NT crime Christmas day baby name Maxim Accounting holiday Duchess of Cambridge lalor park James Ward Willowdale new york times Scouts community engagement case study conferences in the media property medicine cloudy days safe generation alpha australians staying home more demographer goal Gen Y eliane miles schools students TED talk happiness weekly earnings sydney metro New Zeland ipswich energy home ACF high density living home ownership ageing sydney hills royal Andrew Duffin residents jobs of the future national private wealth ideas supply and demand Sydney population generational trends volunteering data the great screenage Aussie mining boom poor who is generation z Christmas day weather identity huffington post generation friendship narcissism Geoff Brailey technology brands cars the lucky country GPO NBRS REIV Conference australian conference speaker mortgage shopper's pick community event online shopping teachers graphs nativity scene long weekend authenticity seasons perth global generations 23 million future of education earn sydney event culture school students FPA real sydneysiders fears future social lives Real Estate Institute of Victoria World Water Day Australian Home learning styles personalities eliane donation wealth and income distribution hobart Northern Territory Christmas Stats buildings greatness apartment population map spend mother's day cultural diversity census ACF17 ferry Christmas lunch Australian communities business index households SMART cultural diveristy logan schools keynote gen z sydney market mover and shaker define aussie culture customer insights award census fail typical australian choice workers faith The ABC of XYZ train annual income acf15 plans Performance Sentiment Index office space sports English rise of local parenting baby names report program ease of travel IT Specialists religion Aussies TEDx Speaker Christmas in Australia community investing rising house prices world educhat low density university degree pharmacy Generation Y global retail staying in media release increasing densification sydney speaker seasons greetings tattoos social research neutral bay faux-ciliser future proofing screenagers education moreton bay 24 million leadership charity results workforce grave decision high school house price innovative learning language affordable careers focus groups school satisfaction village dreaming personal growth DIY What is food insecurity? HSC goals not for profit infographic urban living father's day stay home Australian Families focus group social impact youth unemployment trends Mark McCrindle tertiary education debate study video christian Australia Day 2017 1975 speaker financial fears pharmacies Christmas data research services digital ACF2017 Mark McCrindle in the media conference presentation young australians renter of the future the hills vegetarian omnibus future of shopping responsive DESTEL kate middleton names financial planning showreel environment the hills shire domestic financial house prices potts point presentation urban living index sunburnt country the australian dream ACT 2014 investment participants forecasting workplace culture non profit summer woolworths news year 12 stats Adelaide marriages consumer Word Up social life teach Wagga Wagga Research Director builders grandparents cancel plans city organisational culture Canberra rental stress Charlotte Sydney keynote speaker car cold professional services population milestone teleworking Work place Tuesday Trend wealth younger generations capital cities christmas Australians Elderslie-Harrington park speakers US baby boomers debt organisations millenials emerging generations research report futurist wealth distribution learner experience 2016 census results dream dreams sentiments national wealth 24,000,000 school survey financial future mccrindle equip Queensland: QLD forum aged care education sector internet data visualisation hunger local Australian Census CPI daily commute internships gold coast suburban living relevant research professional speaker economy education future state growth of sydney consumerism growth women lifestyle communicate social enquiry The Daily Edition office JOMO renting young people Mount Annan-Currant Hill training Gen X clothing work-life life Social Trend Cobbitty-Leppington FOMO System's Architect mythbusting engage proactive trends of 2016 dare to dream 2015 work mates housing growth students socialising New South Wales google for education event education research millennials generations marketing resource faux-cilising shbc Population Clock tips Tasmania australian communities forum ABS market research not-for-profit Myth McCrindle Speaker twentyseventeen social shifts Hornsby Shire Council sector entrepreneurial click marrickville australian real estate not for profit research 10 years Financial Planning Association of Australia transport Business analysis australia South Australia product public speaking Channel 7 winter online business performance impact award winner Territory australian community trends report Macquarie University McCrindle Speakers etiquette teaching employmee REIV National Conference faux-cilise blaxland Queensland millionth christmas 2017 Western Australia commuters intern church Christmas presents winter blues aged care puzzle high density apartments baby boom Caregiver public holiday Royals trends analyst selfie leader Financial Planning Association qualitative research megatrends holidays spirituality australian communities trends report social media New Zealand suburb researcher hello fresh Australian Bureau of Statistics coffee lovers children sunny days 1980 Northern beaches Event publication rule keeper social analyst world youth day employment conference growing population screenage local community generation Z baby meals Australia Day shifts cost gender social work monarchy charities McCridle know the times Black Friday Sales australian social research quote government 2016 census analysis care support innovation royal influence tableau wealth and income affordability wolloomooloo Births social issues Skilling ashley fell #censusfail nfp employers salary baby names australia report media christmas trees Jura Australia ACT Report sector wide study communication Crime Rates politics Gen Z Expert water food insecurity house trend tuesday darwin slideshare trends of 2017 Australian Population Jura Coffee overcast family volunteers gig economy Sydney Hills Business Chamber social commentator McCrindle Keynote Speakers entrepreneur Wellington Deaths future proof demography mccrindle research income purpose alpha trades year 7 TEDx mccrinlde ageing population sydney property market fresh bureau society Black Friday in Australia money criminal SRE Black Friday Melbourne cooking Res Vis chairty society trends Assistant Store Manager infographics ultimo Generation X visual mobile communities bus VET sector meetings recap economic property market national crime rates weather trend 1994 change marriage food bank Christmas research Kiwi NFP event professional development January 26th Do It Yourself post rationalism social analysis thrive 2016 emerging trends budget cost of living WA waverton population growth contiki survey design Channel Seven royal baby mccrindle in the media February 16 Retail keynote speaker royal family Australian Trends group session Engineering Manager wedding curiosity financial dreams social trends divorce rate Sydney’s south west media commentary housing easy rider snapshot donate friends media activity thought leadership couple new office educated research on coffee demographics geomapping 2013 entertainment Australian community trends SA Merry Christmas townhouses baby name trends dessert resilience child care research visualisation financial independence CBD going out crows nest future of work hills shire commute EFF research pack princess charlotte Bathburst christianity visualisation shopping centre group prince george newspaper TDE in depth interviews earning workplace story social change the changing face of "know the times" VIC vegemite litter infographic wall speakers pack average aussie local communities repayments optimistic Hills Shire Council Tuesday Trends wage property development 1968 rich TED urban taskforce engagement Valentine’s Day men wages owning a home daily telegraph demographic happy holidays mateship challenge public transport capital city balance travel easter deloitte sydneysider investor changing face of sydney digital economy paying to work parents average sydneysider volunteering manly offenders living Sydney Lifestyle Study 2012 TAS networking leadership workshop area house price rise coffee sun families average Australian outsourcing housing trends facts earnings Education Future Forum cash environmental scanning culturally diverse relational optus my business awards employmer menai Netflix baby name predictions tuesday healthy future social commentary mythbusters student Australian schools live the dream NSW property price priorities university commuting professional presenters victoria Northern Beaches Christian School Vocational education demographic transformations urban development giving micro apartments suburbs presentations mccrindle tea toys rent research data teacher bondi report follow housing market data Research Executive VET staff gig divorce Lower Hunter Region Christmas season Christchurch skills cancelling plans socialites panel brisbane casual household learn global financial crisis home owner hills

Archive