MyStart

From The Bunyip Newspaper

The share of households owning their own home, with or without a mortgage, fell from 71 per cent in 1997 98 to 66 per cent in 2019 20 with the biggest home ownership drop in the age group 25 to 34. In the next decade, a large intergenerational wealth transfer from baby boomers to their children and grandchildren will make it increasingly difficult for people to enter the property market.

That’s not to say young adults no longer view home ownership as a crucial goal. A 2020 study highlighted that 77 per cent of millennials, the bulk of first-time home buyers, and Generation Z agreed that homeownership is an important goal. However, first-home buyers are getting older.

That’s reflected in our own HomeStart data that reveals the average age of first home buyers is in their mid-30s with an annual income of around $90,000, that’s $25,000 more than the average earnings of South Australians. HomeStart’s first home buyers purchase a property with an average price of $435,000 and take out an average loan of $367,000, representing a loan-to-value ratio of 84 per cent. 

One of the biggest barriers to home ownership is the widening gap between the South Australian median house price and people’s average income. Data shows property values have risen at an average of six per cent since 2000 compared to earnings rising by only 3.5 per cent. Fast forward to 2036 when, based on this trajectory, it is estimated the medium property price will be $1.55 million while average annual incomes will be $105,000.

Also impacting the industry is that the traditional home ownership path is no longer a direct journey in which people aim to buy a home once they begin a career. Instead, we’re seeing a growing trend emerging of people moving in and out of home ownership with the main reasons due to mortgage stress, divorce or relationship breakdown, and poor health.

Data reveals that nearly 2 million Australians, or one-fifth of all home owners, left home ownership and returned to renting in the first decade of this century. Of those who left home ownership, nearly two-thirds regained home ownership later in the decade with seven per cent moving in and out of home ownership more than once. This presents an opportunity for the property sector to support the growing cohort of returning home buyers by helping potential customers understand how they can be homeowners once again.

Businesses that provide innovative solutions for aspiring homeowners will have greater success in the future. For example, investigating customers’ options such as leveraging family and friends to help buy a home, accessing shared equity, low deposit loans, some stamp duty assistance, first home owners’ grants, rent-vesting, and rent-to-own options.

By helping customers understand their financing options whether they are selling, buying, or renting, you will establish and grow a relationship with customers for life as a trusted property adviser.

Traditional home ownership path is no longer a direct journey in which people aim to buy a home once they begin a career. Instead, people increasingly move in and out of home ownership, with the main reasons due to mortgage stress, divorce or relationship breakdown, and poor health. PHOTO: REISA