Emma Smith dreams more of travelling the world than she does of buying property in Australia, and that’s despite being lucky enough to receive some inhertitance from her grandparents for a house deposit.
She is one of a number of Generation Y’s, who say they’re disinterested in the great Australian dream of property ownership with a new survey showing that only 10% of people under the age of 25 years think they’ll actually own their own home in the future. Compared to 90% of people who doubted whether it would be possible.
“Even with some inheritance, once you add up all the costs, it’s just very uninspiring,” said the 26-year-old human resources professional from Sydney.
The survey commissioned by consulting firm Urbis, also found that attitudes towards property only get slightly better for 25-29 year olds with 18% of respondents saying home ownership was highly likely, whereas 82% of people were unsure.
The survey of 1000 people adds weight to the view among some economists that the changing attitudes of younger Australians towards property ownership could exacerbate the price falls currently underway in the property market.
It also found that 45% of those that said they were single 43% were not confident about home ownership, compared to only 18% of those in relationships who said it was unlikely.
Canberra ranked as the most pessimistic capital city, perhaps largely because of the transient workforce located in the country’s capital, with 44% (unweighted outcomes) doubting the likelihood of buying property.
This compares to 27% in Sydney who doubted being about to afford a home, 28% in Melbourne, 32% in Brisbane, 38% in Adelaide, 21% in Perth and 20% in Tasmania.
“With more housing supply coming on and a softening of lack of affordability, there is already downward pressure on property prices, and if there’s less interest from younger Australian’s, that will only add to the correction,” said Urbis chief economist Nicki Hutley.
Kobi Rogers is another Gen Y’er who is not exactly dreaming of owning property. Instead she’s spent about $80,000 in five years on life adventures in Hawaii, Japan and Canada.
“I don’t really value assets over experience at this stage in my life. I love being a free spirit travelling around the world in the search of the next big adventure,” says Kobi. “One day I may buy a house but for now I am having way to much fun changing locations every six months.”
The size of a deposit could be one factor affecting the attitudes of younger generations.
If you’re a first home buyer in Sydney where the median house price is around $1 million, the loan to valuation ratio (LVR) that you’re likely to get from the bank is 80%, which means you’d need about $200,000 as a deposit, and that’s without paying stamp duty.
As it stands, nearly 70% of Australians already own a property, and of that 50% of people have a mortgage on that property, according to the Australian Bureau of Statistics from 2010.
(Unweighted means the raw survey outcomes have not been adjusted to match demographic profiles)