The Australian housing crisis is disproportionately affecting young Australians and impacting home-owners, as studies reveal the shift in housing policy creating an unfair advantage for current homeowners
Antagonistic Housing Crisis Conversation
The national conversation regarding the housing crisis in Australia is characterized as antagonistic, often pitting younger Australians against Boomers and creating defensive attitudes, hindering genuine dialogue.
Policy Paralysis and Housing Problems
This antagonistic conversation may be contributing to policy paralysis as governments are more likely to address issues when pressured by a large voter base of all ages. Studies indicate that it is in the interest of most Australians to resolve the housing problems.
Impact on Home-Owners
Experts have reported that the housing crisis is increasingly affecting home-owners in Australia. They highlight the shift in housing policy, privileging current homeowners and their children, while leaving aspiring homeowners in a disadvantageous position.
Challenges Faced by Young Australians
With declining home ownership rates, younger Australians face challenges in saving for a deposit due to rapidly rising house prices, unstable employment contracts, stagnant wages, and the increasing cost of living. Major reforms in labor market regulations and wage-setting institutions from the 1980s and 1990s have contributed to the disappearance of secure full-time employment, making home ownership increasingly unattainable for younger generations.
Financial Impact on Parents
The likelihood of becoming a homeowner in Australia has become more reliant on parental support, disrupting the lives and financial plans of home-owning parents. The rapid increase in house prices has led to an arms race among parents, with a significant rise in parental assistance for first home buyers.
Impact on Retirement Plans
For those in home ownership, larger mortgage debts are causing older workers to delay retirement, leading to increased financial risks related to adverse life shocks such as serious illness, marital breakdown, or redundancy in later stages of life.
Political and Social Implications
The prolonged housing trends have transformed Australian politics, turning residential property owners and investors into a powerful political constituency. This shift has been observed in voting patterns, favoring political parties that maintain policy settings benefitting property ownership. Additionally, a major study found that social cohesion in Australia has decreased to its lowest level, with economic and housing issues being the most cited problems.
Reflection on Desired Future
The current housing crisis raises questions about the long-term implications and the country’s foreseen direction. The overarching concern remains on whether these trends align with the desired future for Australia.