According to a recent survey. The report, published in the Sydney Morning Herald, Young and middle-income Australians are giving up on the dream of owning their own homes.
The survey, which was conducted by the Age and the Sydney Morning Herald, found that this sentiment was particularly pronounced among lower-middle-income earners, who feel permanently shut out of the property market. With median house prices in Sydney over a million dollars and in Melbourne over $750,000, it’s becoming increasingly difficult for many Australians to crack the property market.
The consequences of this trend are far-reaching, impacting society in a variety of ways. For example, it means people find it hard to live in the inner city close to good-paying jobs. It also means that many are delaying getting married and having children, which affects the nation’s fertility and leads to population ageing.
The survey also found that a growing number of 20 and 30-somethings are either staying at home longer or moving back in with their parents because rents are so high and the cost of living is putting pressure on their finances. This has led to tension within families, with some parents finding it difficult to accommodate their adult children.
The impact of these trends is not just social, but also economic. As the property market becomes increasingly unaffordable, it could lead to a slowdown in economic growth, as young Australians struggle to save for a deposit on a home. This could, in turn, impact the wider economy, as fewer people have the means to invest in businesses or start their own ventures.
The rising cost of living is not the only factor that is making it difficult for young Australians to enter the property market. Debt is also a major obstacle, with credit card debt, car loans, and student loans all having an impact on borrowers’ ability to secure a home loan.
According to finance expert and author of Easy Money, Joe Gibson, debt is one of the biggest factors that impacts borrowing power. In particular, credit card debt has a significant impact, as lenders assume that the full credit limit is the borrower’s debt. This reduces their ability to repay the loan, and also affects the calculation of the borrower’s debt-to-income ratio.
Despite the challenges, there are steps that young Australians can take to improve their chances of owning a home. For example, they can reduce their debt levels, save for a larger deposit, and improve their credit score. They can also seek advice from a mortgage broker or financial advisor to help them navigate the complex world of property finance.
In conclusion
The survey’s findings paint a bleak picture of the current state of the property market in Australia. With rising house prices, high levels of debt, and a challenging economic environment, young Australians are finding it increasingly difficult to achieve their dream of home ownership. However, by taking proactive steps to manage their finances, they may be able to improve their chances of securing a home loan and achieving their goal of owning a home.
