With house prices in Australia soaring, new research has drawn links between contradictory government policies and intergenerational inequality in the Australian housing market, further negatively impacting under-40s.
The University of South Australia research has identified that the lion’s share of national homeownership belongs to 58-97 year-olds.
An analysis of data covering three consecutive census periods from 2006-2016 showed that 80% of older Australians, including Baby Boomers and the Silent Generation, were long-standing homeowners. This compared to only about 50% of Millennials (a large group born between 1981-2001) who were homeowners in Australia.
The paper, published late last year, also revealed that 68% of Baby Boomers (born between 1946-1964) achieved homeownership between the ages of 30 and 34.
According to lead researcher Dr Braam Lowies, the disparity showed how government policies that were designed to protect one generation were also capable of hindering other taxpayers.
“Australia has an ageing population, the majority of whom report a desire to ‘age in place’ — to live in the community with some independence, rather than in residential care.
“With growing support from the government — such as home support programs and home care packages — older people can do this with greater confidence and security,” Lowies said.
“For Millennials, this limits their housing options, creating severe housing tenure inequalities. The consequence is that younger people are frequently compelled to revert to the parental home or the rental market — and this is despite government grants to support first home buyers,” he added.
Property expert Peter Rossini suggested more nuanced policies were needed to address the housing inequality between generations of Australians.
“Having bipolar housing scenarios across generations is a demonstration of how the current system is unbalanced,” Rossini said, noting that the proportion of older people over 65 who made up the overall population was forecast to grow to 22% by 2056.
“It’s an unsustainable position and one that requires a review of current housing policy to deliver more refined and considered outcomes for all,” he said.
Lowies said it was clear ‘the great Australian dream’ of homeownership was increasingly further out of reach for young people, with recent reports that the Australian home cost an average of just over $1 million in the past 12 months. This represents a 25% increase on the year before.
“Millennials are finding themselves locked out of the market as the Silent Generation (born between 1925 and1945) and Baby Boomers retain a significant portion of the housing stock, much of which has considerable value and development potential due to its lot size and location,” he said.