- Home dream evaporates - record number of Gen Ys say they will never own a home
- More than a third of prospective first time buyers say goodbye to the Australian dream
The great Aussie dream of owning your own home looks set to remain just that for one-in-three
Gen Ys, who say they will be locked permanently out of the property market.
The sobering assessment by many Gen Y's in the latest Bankwest/Mortgage and Finance Association (MFAA) Home Finance Index adds fuel to the debate about a fast emerging "two speed" property market with more and more young Australians expecting to be life-long renters.
More than half of Gen Ys say they are shelving their plans for buying a home because of how much debt they would need to carry to afford a property - up more than 10 per cent from the last survey in November 2009.
"We have never seen such pessimism amongst prospective first time buyers throughout the past five Indexes," said Vittoria Shortt, Chief Executive, Bankwest Retail. "70 per cent of respondents were very concerned about the level of debt they will be committed to if they buy a property."
According to CEO, MFAA, Mr Phil Naylor; "In a climate of rising interest rates and increased house prices, first time buyers have resorted to back-to-basics savings plans in an attempt to enter the property market."
"Given that some lenders are tightening home loan criteria, it's no surprise that prospective first time buyers will need to make a concerted effort to save for a deposit. In fact our research showed more than 25% of prospective first time buyers are looking to live at home in order to save a deposit," said Mr Naylor.
"Of those delaying home purchases, fewer are asking families to help fund a home loan deposit. That figure has fallen from 20.4% to 14.7%."
Interestingly of all states surveyed, West Australians were the most optimistic of all when it came to the prospect of home ownership. More than 50% of potential first time buyers in West Australia felt optimistic about the prospect of home ownership, which is significantly above the national average of 43.7%.
Many young Australians are concerned that house prices were last year artificially inflated by the boost to the first-home owner grant and generational lows for interest rates. Now, with the grant wound back, and interest rates rising, Gen Ys are being shut out of the market. More than three quarters of those surveyed (75.6%) felt the government was not doing enough to help them enter the property market, significantly higher than the results a year ago (62.8%).
First time buyers profile
The survey categorises first time buyers as; people who did not own their home but were planning to purchase a residential or investment property within 12 months. Typically, first time buyers sampled were more likely to be female, aged less than 30, employed full- time, live alone or in a couple and have no children. Most were likely to live in a capital city of State or Territory.
