The Dwindling Australian Dream: Home Ownership Beyond Reach?

1

The situation is more dire for median-income renters, who find that they could compete for just 11% of homes sold last year, and an even narrower 9% for standalone houses. This limited access forces many to reconsider traditional homeownership as a viable option.

Surveys are underscoring this crisis. An Accent Research poll revealed a significant gap between aspiration and reality, with only 15% of participants confident that young Australians can secure home ownership without substantial financial support from external sources such as family.

The hurdles to entering the housing market don't end here. Analysis from Money.com.au demonstrated that the journey of amassing a deposit has become more onerous than ever for first-time buyers, who now face the daunting prospect of taking out hefty mortgages for homes that might previously have seemed modest.

Reflecting these financial strains, the average size of owner-occupier mortgages for first-home buyers ballooned to a historic high of $538,200 as of September 2023. This surge represents not just increasing home prices but a shift in expectations and financial commitment needed just to step onto the property ladder.

Adding a historical perspective to this discussion, independent economist Tarric Brooker shared a comparison on social media. His chart contrasted the stark change in housing affordability between 1998 and now. Back in 1998, armed with an average full-time income, Australian households could afford homes virtually everywhere except Sydney.

Examining this longitudinal data—sourced from benchmark rates in 1998 and present-day rates, albeit currently lower than benchmark rates—emphasizes the affordability decline, now with Darwin being the occasional outlier.

Delving deeper into historical patterns, housing affordability actually showed more strain in 2022 compared to pre-1998 levels, even before the Reserve Bank of Australia embarked on its current cycle of monetary tightening. This insight challenges perceptions and encourages reflection on any symmetry between historical and current affordability conditions.

Today's scenario is further complicated by elevated mortgage repayments reflecting a steep rise compared to interest rates touching as high as 17% in the 1990s. This comparative data begs reflection on how consumer expectations and economic realities shape the housing landscape.

Alex Joiner from IFM Investors contributed further historical analysis by demonstrating that mortgage repayments as a portion of income slightly outpaced these present figures in 1989-90, prompting considerations around economic adaptability and inflation-adjusted incomes.

Joiner poignantly remarked, "It will be a story we will tell children in future that there was once a time in Australia when a one income household (or individual) could buy a house" on Twitter. This sentiment encapsulates the gulf between past and current generational experiences.

The original article from PropTrack highlighted these economic divides which stress a narrative of a once egalitarian Australia, increasingly drifting towards disparities tied to class. Intergenerational wealth transfer, rather than earned income, now often defines home ownership possibilities in Australia, significantly altering the modern perception of the Australian Dream.

Published:Wednesday, 6th Nov 2024
Source: Paige Estritori

Share this news item:

Finance News

Clear

Uncovering the Impact of Unsolicited Solar Sales on Consumers 04 Jul 2025: Paige Estritori In a concerning revelation, Australian retiree Christine Hirchfield shares her ordeal with an unsolicited solar installation that turned into a financial nightmare. Despite her initial enthusiasm for cheaper energy bills and a greener home, the project remains incomplete more than a year later. Consumer groups are now advocating for a nationwide prohibition on deceptive sales practices that target vulnerable consumers like Ms Hirchfield. - read more

Australian Online Retail Sees Continued Growth in May Amidst Nationwide Spending Surge 03 Jul 2025: Paige Estritori Australian online retail sales experienced a modest rise in May, as consumers continued to invest in fashion, games, and toys. According to the latest figures from the National Australia Bank, there was a 0.7% increase in online sales for the month, compared to a 1.1% growth in April. Over the past year, Australians have spent approximately $63 billion on online retail purchases. - read more

Pay Boosts and Policy Changes: A Closer Look at Financial Updates for Australian Workers 03 Jul 2025: Paige Estritori The starting days of the new financial year bring significant changes for Australian workers, particularly those on minimum wage. As of Tuesday, the minimum wage will rise by 3.5 per cent, increasing hourly earnings to $24.95, or $948 weekly. This adjustment also affects award wages and comes as a response to rising living costs, outpacing current inflation rates. - read more

US Dollar Faces Historic Decline Amid Trump’s Tariff Policies 03 Jul 2025: Paige Estritori The US dollar has experienced an unprecedented decline, marking its worst first-half performance since 1973. Concerns surrounding President Donald Trump's tariff policies have intensified, leading to a substantial drop in the value of the world's primary reserve currency. Specifically, the dollar weakened by 10.7% against a basket of major trading partners' currencies in the first six months of the year, reminiscent of Nixon's era when the dollar was untethered from gold. - read more

Auditor Deregistered After Brite Advisers Collapse 30 Jun 2025: Paige Estritori The Australian Securities and Investments Commission (ASIC) has deregistered auditor David Makowa, previously of DM Advisory Services, due to his role in the downfall of financial advice firm Brite Advisers. This decision follows Makowa's acceptance of a court-enforceable undertaking in which he agreed to surrender his auditor registration permanently, pledging never to re-apply. - read more