As the property market shows signs of recovery, millennials are now losing hope that they’ll be able to fly the coop before their 30th birthday, new research has revealed.
According to CoreLogic’s Perceptions of Housing Affordability Report 2019, 34 per cent of Australians think they will remain at home until they are 30, up by 14 per cent from just two years ago.
CoreLogic International’s CEO, Lisa Claes, expressed concern that the younger generation has been locked out of the housing market.
“The report proves that the ‘cubby house’ syndrome – where children are prolonging their home stay with parents – is intensifying,” she commented.
“Our youngest generation is effectively being locked out of the market and increasingly dependent on parents.”
‘Bank of mum and dad’
Not only is poor affordably meaning the kids are sticking around for longer, they are increasingly turning to the family for help in purchasing their first property.
The research noted that a quarter of millennials say family assistance to raise a deposit would be a great help when buying a first home, up by 4 per cent from 2017.
CoreLogic’s head of research, Tim Lawless, highlighted how “the ‘bank of mum and dad’ – where young people rely on their parents to support their entry into the housing market, either by helping with a deposit or assisting with loan repayments – is becoming one of the last sources of hope for millennials”.
Despite the challenges, 86 per cent of millennials still rate home ownership as important.
It’s the highest rating level for the importance of home ownership aspirations across all demographics, according to the report.
“Millennials haven’t given up on the great Australian dream – they want to own homes,” Mr Lawless commented.
“In fact, by being denied it, they want it even more, but they are losing hope that they will ever be able to realise that dream.”
Struggling to get a loan
Not only are Australians struggling to raise a deposit, they are finding it harder to get approval from the banks, CoreLogic has also found.
“The severe tightening of credit availability following stronger prudential regulation and outcomes related to the banking royal commission is hurting Australians, who are struggling to get a loan,” Mr Lawless said.
“Lenders also have a greater focus on evaluating and assessing individual borrower’s expenses.”
CoreLogic highlighted the impact as particularly evident for low-income households, with the report revealing that 31 per cent of households with an income of less than $50,000 wouldn’t be able to raise more than a 5 per cent deposit.
A further 41 per cent wouldn’t be able to raise more than 10 per cent, CoreLogic also found.