June 19, 2017
More than 60% of Australians believe only the wealthy can achieve the ‘Great Australian Dream' of home ownership, new data has revealed.
According to Mortgage Choice and CoreData's Evolving Great Australian Dream whitepaper, 63.2% of Australians said “only people with a lot of money can hope to achieve the Australian Dream”.
“This finding is not surprising considering that property prices have grown faster than wages,” Mortgage Choice chief executive officer John Flavell said.
“According to the Australian Bureau of Statistics' Wage Price Index, wages grew 12.6% between March 2012 and March 2017.
“Meanwhile, data from CoreLogic found property values across the combined capital cities rose 21.86% over the same time period.”
But while it is undoubtedly becoming increasingly difficult for some buyers to get their foot on the property ladder, Mr Flavell said property ownership remains the ‘Great Australian Dream'.
“Regardless of how difficult property ownership becomes, people still want to own a home. In fact, our research shows people rate ‘home ownership' as more of a priority than career success, travel, or having a luxurious lifestyle,” he said.
But while property ownership remains the ‘Dream', Mr Flavell said the type and style of ‘Dream' has evolved in recent years.
“Traditionally, the Great Australian Dream has been seen as a freestanding house on a quarter acre block in the suburbs. Today however, that dream has evolved to include different types of dwellings, like apartments.
“According to the Australia Bureau of Statistics, 52,000 apartments were approved for construction in 2011. By 2016, that number had jumped to over 100,000 – proving that apartments are becoming an increasingly popular property option amongst Australians.
“And while some buyers are choosing to purchase apartments for the lifestyle options they offer, a lot of people are seeing them as a cheaper way into the market.
“Of course, buying a ‘cheaper' dwelling isn't the only strategy home buyers are using in order to get their foot on the property ladder.
“From the data, it is clear that Australians are keen to use a variety of purchasing strategies in order to achieve their property ownership goals.
“According to the findings of the Evolving Great Australian Dream Whitepaper, 31% of Australians reduced their spending in order to save a property deposit, while 24% decided to buy a smaller (more affordable) property, and 20% thought to reduce the overall expense of purchasing property by buying with friends and family.
“In addition, 6% looked for financial assistance from their parents, 5% moved back home to save, and another 3% chose to rent-vest.”
Mr Flavell said these strategies prove that Australians are savvy. They understand that it is much easier to purchase their dream home once they already have a foot on the property ladder.
“Home buyers understand that the biggest hurdle on the path to purchasing is saving the deposit and taking that initial step into the property market,” Mr Flavell said.
“Consequently, they are happy to try new strategies and make adjustments to their financial situation in order to achieve their goals.
According to the whitepaper findings, 63% of Australians had implemented various savings tricks in order to improve their financial situation, while a further 23% sought professional financial advice.
“While it is good to see Australians are very financially savvy and know exactly what it takes to make their goals a reality, I believe there is more that the government – both state and Federal – can do to help home buyers achieve their dreams,” Mr Flavell said.
“In recent months, we've seen the Victorian state government boost its First Home Owner Grant, and both Victoria and New South Wales abolish stamp duty for some first home buyers.
“While these are steps in the right direction, more needs to be done. Housing affordability is a crisis in Australia and we need to seek new ways to rectify the situation.
“If we are to truly address the issue of housing affordability, we need our state and federal governments to look beyond grants and tax breaks and start looking at the root cause – lack of appropriate supply together with appropriate infrastructure investment.”