{"id":8938,"date":"2016-08-16T01:00:35","date_gmt":"2016-08-15T15:00:35","guid":{"rendered":"http:\/\/realestatetalk.com.au\/?p=8938"},"modified":"2016-08-16T01:00:35","modified_gmt":"2016-08-15T15:00:35","slug":"what-happened-to-the-great-australian-dream","status":"publish","type":"post","link":"https:\/\/channels.realty.com.au\/realtytalk\/what-happened-to-the-great-australian-dream\/","title":{"rendered":"What happened to the great Australian Dream? – Michael Yardney"},"content":{"rendered":"

 
\nHere is an amazing stat – less than half of all Australians could be homeowners by 2017.\u00a0 That\u2019s next year! That is part of the HILDA Report.
\n Michael Yardney<\/strong><\/a> tells us about the report and some of its findings, as we ask – what’s happened to the great Australian dream of everyone being able to own a home to call their own?
\n <\/p>\n

Transcript:<\/strong><\/h4>\n

Kevin:<\/b>\u00a0 What we know as the Great Australian Dream may not be a reality anymore, well certainly not in the years and decades to come. There\u2019s been a new study that\u2019s been published, and I want to talk to Michael Yardney about it.
\nGood morning, Michael. Thanks for your time.
\nMichael:<\/b>\u00a0 Hi Kevin.
\nKevin:<\/b>\u00a0 Michael, this is called the HILDA Report. Tell me about it. How did it come about, and what are some of the findings?
\nMichael:<\/b>\u00a0 Professor Roger Wilkins from the University of Melbourne\u2019s Institute has been following about 17,000 Australians, Kevin, for the last 15 years, and he\u2019s giving us a picture of what\u2019s happening to the nation about households, about their finances, about their employment, about family life and health, and I guess what we\u2019re particularly interested in today is what it means to their wealth, what it means to home ownership, and the gap that\u2019s widening between the older wealthier people and the younger generations who are having some struggles.
\nKevin:<\/b>\u00a0 The report showed, I think, that there was a decline in the number of owner-occupiers over that period.
\nMichael:<\/b>\u00a0 Over the time, there has been an increasing decline in owner-occupiers, and the report is predicting that by 2017 \u2013 and if my sums aren\u2019t wrong, Kevin, that\u2019s next year \u2013 there\u2019s going to actually be about a 50% home-ownership rate around Australia. So half of Australians won\u2019t be owning their own home but they\u2019ll be in rental properties, Kevin, and in general, it\u2019s the younger generations.
\nKevin:<\/b>\u00a0 Already we\u2019re starting to hear people say, \u201cOh, this just underlines the fact that housing in Australia is becoming unaffordable.\u201d There are two factors here, Michael. One is affordability, certainly, and the other one is the generation. Do they really want to own a property?
\nMichael:<\/b>\u00a0 Kevin, that\u2019s a really good point because the Generation Y\u2019s are very different from when you and I were in that age group. They\u2019re not putting down their roots as soon. They\u2019re not as comfortable taking long-term jobs as soon as we used to. They have traveling aspirations and they\u2019re moving around a lot. Often they\u2019re going to become what we like to call renting investors. They rent where they want to live but can\u2019t afford necessarily to, and then a lot of them are still buying investment properties.
\nOne of the other parts of the study showed how many people are buying investment properties, and that\u2019s increasing. But yes, you\u2019re right, Kevin, the younger generations are not setting their roots into the ground as early in their lives as the older generations did before them.
\nKevin:<\/b>\u00a0 Yes, and just to underscore that point, Michael, I think there\u2019d be no doubt that we\u2019d have to say if there was an unaffordable state anywhere, it would be New south Wales or Sydney because of the great price growth we\u2019ve seen there. But I notice in the report that it says that decline in home ownership was greatest in Victoria followed by New South Wales. Once again, I just wonder how much of this can be put down to affordability.
\nMichael:<\/b>\u00a0 It\u2019s not purely affordability. Another factor, of course, is the aspirations of younger people and the sort of property they want as their first home. I know when you and I started off, we were happy with a small apartment and you had cardboard boxes for furniture. A lot of younger people are not comfortable unless they have a media room and all the stainless-steel appliances and the things that their parents took 30 or 40 years to achieve.
\nBut they are buying property. They\u2019re getting on the property ladder, recognizing that it is a way of creating wealth and maybe the investment property will lead them later on to have a home, Kevin.
\nKevin:<\/b>\u00a0 Yes. What about housing grants, first-home owner grants and so on? It would be interesting to look at the number of people who qualified for those as opposed to those over 65 who are maybe going on and getting another investment property as opposed to a first home, Michael.
\nMichael:<\/b>\u00a0 Kevin, what the study showed was that after the GFC, there was a bigger drop in first-home owners, and you\u2019re right; it actually had to do with the dropping of first-home owner grants for established properties and pointing them to new properties. But in general, young people don\u2019t always want to live in the outer suburbs; they want to be where the action is, closer in. And they don\u2019t want to live in those big high-rise monolith blocks. So it\u2019s actually stopped them buying a lot of the properties they want.
\nInterestingly, the study showed that 70% of first-home owners would prefer to buy an established property, and if they\u2019re not getting a first-home owner grant for that, they\u2019re buying investment properties instead.
\nKevin:<\/b>\u00a0 That gap between the young and old in terms of wealth, this would be highlighting that, Michael, wouldn\u2019t it?
\nMichael:<\/b>\u00a0 Kevin, the study showed that the wealthiest households were couples over 65, who\u2019ve experienced a real increase in their wealth \u2013 almost 70% increase in their wealth \u2013 since 2002 when the study started, and it has a lot to do with their higher rate of home ownership, their higher level of superannuation, and the fact that a lot of them also own one or two investment properties. So a lot of Australia\u2019s wealth is in real property, Kevin.
\nKevin:<\/b>\u00a0 Michael, it comes down to choices, doesn\u2019t it? I think a lot of younger people are making the choice and saying, \u201cThis isn\u2019t all that important. Right now, I\u2019d much rather have a better lifestyle, a bit of disposable income, live where I want to live, and maybe do a bit of travel.\u201d And quite frankly, when you look at what happens overseas, there\u2019s nothing really wrong with that.
\nMichael:<\/b>\u00a0 Kevin, 100% right. It\u2019s the value you put on various things, and there\u2019s a lot of sense in the argument that the young people are putting. And overseas, this is the way it works. People are renters all their lives. If you lived in London or New York in Manhattan, you wouldn\u2019t expect to be able to buy a home. In Melbourne and Sydney in particular, international-sized cities, international-valued cities, as well. Our demographics, how we live where we want to live, how we choose to live, is changing. This is being reflected in home ownership rates.
\nKevin:<\/b>\u00a0 Yes, indeed. Always great talking to you, Michael Yardney. Thank you so much for your time.
\nMichael:<\/b>\u00a0 My pleasure, Kevin.<\/p>\n","protected":false},"excerpt":{"rendered":"

  Here is an amazing stat – less than half of all Australians could be homeowners by 2017.\u00a0 That\u2019s next year! That is part of the HILDA Report. Michael Yardney tells us about the report and some of its findings, as we ask – what’s…<\/p>\n","protected":false},"author":176692471,"featured_media":8939,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[32,34,10,11,13,17,22,25],"tags":[101],"class_list":["post-8938","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-buying-a-property-topic","category-finance-topic","category-kevin-turner-sponsored-channels","category-kevin-update","category-latest-story","category-property-investment","category-research-topic","category-sponsored-channels","tag-podcast"],"yoast_head":"\nWhat happened to the great Australian Dream? - Michael Yardney - Realty Talk<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/channels.realty.com.au\/realtytalk\/what-happened-to-the-great-australian-dream\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"What happened to the great Australian Dream? - Michael Yardney - Realty Talk\" \/>\n<meta property=\"og:description\" content=\"  Here is an amazing stat – less than half of all Australians could be homeowners by 2017.\u00a0 That\u2019s next year! 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