Home ownership in Sydney to become distant dream
We all know that it’s becoming increasingly harder to own your own home, but for more than half of Australian adults, particularly the younger generation, the idea of owning a home is becoming a distant dream.
According to a recent survey of 17,000 Australians, less than half of respondents will end up owning a home by next year with sky-rocketing property prices to blame.
And for those in Sydney, property buyers are feeling the crunch, with the highest property prices in the country found here. In fact, NSW is reported to have the equal-lowest rate of home ownership in the country.
Because of this, many Australians are now turning their back on home ownership and continuing to rent instead. Others are now looking at buying property as an investment first rather than as a home to live in to capitalise on the tax deductions that only buying a property can bring, especially those bought off the plan which bring in the highest depreciation benefits in year one.
According to data from the Household, Income and Labour Dynamics in Australia (HILDA), there has been a significant decline in the proportion of households that are owner-occupied. In 2001, 69 per cent of households were owner occupied compared to 65 per cent in 2014. For NSW though, this fall has been steeper, from 68 per cent, down to 63 per cent.
The data from HILDA shows that at an individual level, just over half (51.7 per cent) of Australians aged over 18 years own a home.
The report also predicts “It is likely that in the next few years less than half of adults will be home owners”.
According to census data that there is a clear generational divide in home ownership, with approximately 80 per cent of households headed by a person over the age of 65 own their own home. Compare this with households headed by a person between the ages of 25 and 34 and this falls from 60 per cent to 47 per cent.
Interestingly the wealth of the typical Australian household headed by a person over 65 grew 23 per cent between 2006 and 2014 from $535,000 to $656,000, according to HILDA data. However, those households headed by people aged 25 to 54 saw their wealth shrink over the same period. This was mainly due to policy changes including halving the tax on capital gains and super tax changes which has benefited older Australians.
With home ownership becoming a distant dream for many, property investment is one method that is being considered more and more. Particularly, if you live in a city like Sydney that has extremely high property prices, we are encouraging buyers to invest interstate in growth areas like Brisbane which are still affordable. This allows you to get into the property and own an asset which can be utilised in the future towards owning your own home.
To learn more about buying a property as an owner occupier or as an investor, why not speak to one of our Property Consultants at iBuyNew. We can help create a plan to reach your goals and show you clever ways on how to attain home ownership.
Call us today on 1300 123 463 to find out more.
Published on 21st of July 2016 by Marty Stanowich