If you tune into news media regularly, it’s easy to form the view that the prospect of young Australians buying real estate is remote, if not impossible.
There are daily headlines telling us that it takes 10 or 15 years to save a deposit, or that most young Australians have given up on home ownership and that young adults are doomed to a life-time of renting.
As is so often the case with mainstream media and their love of negative sensation, the reality is quite different. First home buyers are highly active in markets across Australia.
But first, let’s look at some of headlines with which we are afflicted every day in Australian news media:
“Housing crisis escalates as affordability worsens”.
“It’s insane how much you need to save to buy in Queensland”
“Melbourne home seekers need to save $250,000-plus to buy a home”
“Cost of living crisis holding back first home buyers”
And the most spectacular of them all …
“The Australian Dream crashes into the affordability brick wall”.
One article in the Fairfax media declared: “Aussie home seekers are being made to come up with hundreds of thousands of dollars in upfront funds to buy a home.”
How did they come up with such a finding?
By focusing on a 20% deposit (which you don’t need), the median house price (which is ridiculous because FHBs don’t buy at the median price) and always houses, never units which are the dwelling of choice for more and more people and are often half the price of houses in the same suburb.
In other words, the objective of those media outlets was not to be informative or helpful – it was simply to create a screaming headline (and the truth is optional).
And that article with the headline “The Australian Dream crashes into the affordability brick wall” ?
The intro to the article immediately contradicted the headline. It said:
Westpac’s Home Ownership Report shows an increase in the share of Australians aspiring to own a home.
The survey found 44% of Australians plan to buy a new home in the next five years, up 9 percentage points since July 2023.
So what’s really happening out there in first-home buyer land?
The latest data from the Australian Bureau of Statistics shows that, far from being priced out of the market, buying activity by first-home buyers has increased recently.
The figures on loans to buy a home show that the number of loans to FHBs rose 4.3% in February, compared to January, and were up 13.2% compared to a year earlier.
The figures showed that the number of FHBs buying homes was broadly in line with pre-pandemic levels.
National Australia Bank senior markets economist Taylor Nugent said first-home buyers were proving resilient.
He said higher mortgage rates were not proving much of a hurdle for first-time buyers.
In addition to that, research by the Commonwealth Bank finds young Australians are also a dominant force among those buying investment properties.
It found that the most active age group among those buying investment properties is the cohort aged between 27 and 42, the one know as Millennials. That group accounted for almost half of investor property purchases in 2023.
CBA said investors are getting younger, overall, because of the growing incidence of people getting into the property markets as rentvestors – i.e. people who choose to rent their homes and buy an investment property.
So, is home ownership a fading dream for young Australians?
According to the data, rather than the media rhetoric, the answer is emphatically NO.
The dream is very much alive.
