Is the property market simply out of reach for younger Australians?
Australian millennials were ranked second last in home ownership in a recent survey by international bank HSBC.
The bank surveyed 9,000 millennials — people between the ages of 18 and 36 — in nine different countries.
The survey revealed home ownership rates among Australian millennials were only marginally higher than in the United Arab Emirates — where just 26 per cent of millennials owned a home.
Alice Del Vecchio, head of mortgages at HSBC Australia, said that in countries such as China and Mexico up to 70 per cent of millennials owned a property.
“That’s not the case here, why isn’t it the case? It’s not that they [millennials] don’t want to, it’s just they can’t get into the first step of a property purchase,” she said.
Ms Del Vecchio said the survey also highlighted the lengths Australian millennials were going to in order to save up a deposit.
“Some talked about [delaying] having children, others talked about staying at home,” she said.
“[Using the] bank of ‘mum and dad’ — can we get mum and dad to help us?
“And that’s obviously becoming a theme that we’re seeing in terms of mortgage lending as well.”
Millennials ‘don’t stand a chance under current policy’.
For many millennials in Australia, saving up a house deposit is only part of the battle — they also have to compete at auctions where prices have been soaring.
Daniel Mookhey, a Labor member of NSW Upper House, has written on the challenges younger Australians face buying their first home.
“You rock up to auction after auction and all of a sudden you find prices have shot up faster than your ability to save,” he said.
“I think as a result a lot of people feel like they can’t keep up with the treadmill so they just drop off.”
Mr Mookhey said many millennials did not stand a chance of ever owning a home, unless current housing policy settings changed.
“I think the first thing we need to do as a country is reset our tax laws around property investment, so investors are not privileged over home owners as they currently are.”
He also said Australian policy makers should look overseas for ideas around reducing the cost of home ownership.
This post originally appeared on ABC News.
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