Young Australians’ hopes of well-paying jobs and starting a family are being frustrated by a dysfunctional housing market, the head of the Productivity Commission has warned. Source: The Age.
Danielle Wood, who is due to present evidence to a parliamentary inquiry into the state of the property market this week, said that decades of property prices rising far faster than incomes had left young people facing a bleak future and an effective fall in living standards.
The Albanese Government has argued that its hotly contested changes to capital gains tax and negative gearing concessions in the budget are aimed at improving the chances of younger people getting into the property market.
House prices were already falling in Sydney and Melbourne before the changes, but tax and industry experts believe values will slip further over the rest of the year.
Ms Wood said it was clear that the 30-year surge in house prices had disproportionately hit younger Australians, who were increasingly frustrated by an economy that was not working for them.
High-priced housing and modest wage growth meant younger Australians were denied choices – from where they worked to whether they started a family – that previous generations had taken for granted.
“What we are seeing is much lower rates of home ownership among people in their 20s and 30s than we had in the past,” she said.
“This is building a sense of frustration as these people don’t have the same access to the Australian dream as people in the past had.”
Commission research has found that two-thirds of people born between 1976 and 1982 earned more than their parents at the same age. But this improvement in income had effectively ended.
People born in the 1990s are the first age cohort to have experienced almost no growth in their incomes compared with people born a decade earlier at the same age.
Between 1997 and 2025, property values grew three times faster than wages, making it much harder to buy a property. Even when possible, the purchaser was saddled with an increasingly large mortgage.
According to the commission, income growth for young people has stalled, while their “wealth and their housing outcomes have gone backwards”.
FULL STORY
High-priced homes have broken the intergenerational bargain (By Shane Wright, The Age)
