Young people battle to own home, HILDA report shows

YOUNG homeowners are struggling to keep their heads above water, with new figures showing mortgage debt has almost doubled in just over a decade.

YOUNG homeowners are struggling to keep their heads above water.

New figures show mortgage debt has almost doubled in just over a decade.

The dream of owning a home is becoming less of a ­reality for young adults, who are increasingly being locked out of the property market and instead choose to live at home with their parents.

This year’s Housing, Incomes and Labour Dynamics of Australia survey sheds light on the home ownership crisis and the financial sacrifices young people are making to own their own property.

Average mortgage debt for homeowners aged 18-39 has nearly doubled, from $169,200 in 2002 to $336,590 in 2014.

Professor Roger Wilkins, of the University of Melbourne’s Institute of Applied Economic and Social Research, said most failed to pay down the debt, which on average rises year on year, and has contributed to an 11 per cent drop in young adults who own property.

“The increased debt seems to be driven by people taking advantage of redraw facilitates or refinancing. (Because) house prices are strong, they are feeling the need to access some of the increased equity in their home to fund living expenses like buy a car or pay for school fees,” he said.

Newlyweds Adrian and Natalie Abela bought their Bentleigh East home last year and regularly find themselves worrying about the mortgage.

“They are stressful when the bills decide to come at once, before you know it you have very little money to yourself ‘til the next payment,” Mrs Abela said.

“We are looking at starting a family sometime soon.

“At some point the income for myself will not be regular, which puts stress on us as a family to ensure we make ­repayments on time on one ­income.”

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Newlyweds Adrian and Natalie Abela regularly find themselves worrying about the mortgage. Picture: Andrew Tauber

Mrs Abela said they had tightened their belts.

“Our lifestyle has definitely changed. We do not eat out as often, we think twice about our purchases and have started to do our food shopping at Aldi,” she said.

Young adults are living at home with their parents for much longer.

In 2015, 60 per cent of men aged 22-25 and 48 per cent of women, in the same age bracket, were living with mum and dad, up 43 per cent and 27 per cent from 2001. Pakenham mum Wendy Andrews said 27-year-old son Jonathan had not flown the nest yet.

She said housing affordability was a factor that prevented him moving out.

“He lives with us to save money. He has a girlfriend he spends a lot of time with but comes home with dirty clothes and picks up clean ones, has a shower and a sleep, and is off again,” she said.

Prof Wilkins said Melbourne experienced the biggest decline in home ownership for young adults, across capital cities, down 14.4 per cent from 2002-2014.

“That is mostly explained by the extraordinary house prices that we have seen since the beginning of this century and have continued to grow even in recent years when household incomes haven’t been growing,” he said.

“It’s making it that much harder to access the housing market.”

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