Squeezed out of the Australian dream: Two-thirds of young people are giving up on home ownership

Young Australians and middle-income earners have given up on ever buying their own homes amid mounting evidence the nation’s dysfunctional housing system is destabilising the entire economy.

Experts believe the nation’s living standards and productivity performance are being harmed by the way the property sector commands a growing proportion of consumers’ incomes and distorts the way businesses and employees make key economic choices. So serious are the problems there are fears Australia could become a “Jane Austen world” where wealth will be determined by parents’ housing portfolios, and people are forced into choosing between buying a home and having children.Long-time housing policy critic, independent economist Saul Eslake, believes policy missteps over the past three decades have contributed to a situation that is undermining the living standards of future generations.

Resolve director Jim Reed said high house prices and rents meant younger people were being squeezed by not buying and stretched if they did manage to purchase a home.“My researchers in this area tell me that many young people have simply given up on the dream of owning a home, at least in their early careers, and some are even telling me that they are giving up on having a family because they can’t afford to look after themselves, let alone more mouths.

Support fell to 51 per cent to relax planning rules to allow more homes outside a person’s local area. This dropped to 41 per cent if laws were eased to allow more homes in a person’s own suburb. “The ability to house people close to job opportunities, and for firms to locate close to skilled labour, is the equivalent of mining or manufacturing firms locating close to raw materials or port infrastructure – the key difference being that the location of skilled workers is based on individual choices and shaped by policy,” he said.

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