Affordability is the most-debated and the most confused issue in residential real estate.

While the rental shortage and rising rents occupies the minds of many, the property issue that occupies the most space most often in news media and in the minds of Australian consumers is housing affordability.

It has been this way for years, indeed for decades. And while the so-called Great Australian Dream is often declared dead, with young people doomed to a lifetime of renting, the evidence suggests otherwise.

I recently finished working on a report with financial comparison website Canstar which demonstrates that the Dream is very much alive.

The Deposit Stars report shows that there are attainable options for young buyers in all our city and regional markets, including the biggest and most expensive cities.

And the finance data indicates our property markets remain as active as ever. 

A report from the Housing Industry Association in August 2024 noted that “various segments of the housing market are increasingly active, with lending to first-home buyers, owner occupiers, and investors increasing in the first half of 2024”, based on the latest ABS lending data.

HIA economist Maurice Tapang said: “This increase in lending is partially driven by first home buyers. The number of loans issued to FHBs in the June quarter was 5.8% higher than the March quarter.”

This reflects ABS data on the broader market encompassing all types of residential real estate loans up to the end of June 2024.

One of the reasons home ownership is often declared beyond the reach of the average consumer is that most reports are based on unrealistic parameters. 

As I comment in the Deposit Stars report, most analysis on affordability is based on the size of a 20% deposit to buy a house at the median price in our major cities and how long it would take to save such a deposit.

These reports preclude the possibility of smaller deposits, particularly with the help of government programs. 

They overlook the reality that most people entering the market for the first time buy houses in the lower price ranges well below the city’s median price.

And they usually ignore the preference of many buyers for attached dwellings – apartments, townhouses and units – and not only because they’re cheaper.

Many of the locations featured in the Canstar report reflect a growing phenomenon in Australian real estate: the rise of attached dwellings as the home of choice by more and more buyers.

A range of cohorts are opting increasingly for units and townhouses, including downsizers, lifestyle buyers, migrants and first-home buyers.

One of the features that draws growing numbers to apartments is location appeal. Not only do attached dwellings allow people to access property in good locations at cheaper prices than houses, but the average unit is better located than the average house.

The “Measuring Home Price Differences” report by Infrastructure Victoria found that units consistently trump houses on proximity to desirable features. 

The report says: “Units are located closer to selected infrastructure types, on average, than houses and townhouses.”

This is one of multiple factors driving higher demand for units – challenging the dominant paradigm of real estate (that houses always outperform units and townhouses on capital growth).

That is undoubtedly changing.

Recently Ubank, which is a division of National Australia Bank, published a survey which found more than half of Gen Z and Millennials who don’t own a home are looking to make a move on the property market within the next five years.

56 per cent of survey respondents – all Australian Gen Z and Millennials between the ages of 18 to 43 – aim to purchase their first property within the next five years.

Nine out of 10 respondents agrees that purchasing a home was one of their goals in life – although most acknowledged it won’t be easy.

In addition to all that, research from the Commonwealth Bank confirms that ownership remains an ambition and that the number of first-time buyers going it alone is growing.

According to data from the big four bank, 40 per cent of first home buyers purchased their property alone in the first six months of 2024 – without going in on the purchase with a partner, friend, or family member.

That’s a jump from the 35 per cent of first-time buyers doing the same in 2019.

So there is compelling evidence that home ownership not only remains a primary goal for young Australians, but that it is being achieved in growing numbers.