Lost Property series: Kicked out

They might be more informed than any previous generation, but they face obstacles that to many of them seem dauntingly unfair.

Lost property part one special series

A generation of young people is being locked out of the major property markets, and they are making a lot of noise about it. Australia’s 4.4 million millennials, aged 23 to 40, are postponing or cancelling plans to settle down and buy a home. The social and economic consequences of this for all Australians are serious and long term.

The millennials’ experience contrasts starkly with Baby Boomers, currently aged from mid 50s to low 70s. Boomers battled through deep recessions with interest rates into the high teens, married earlier, travelled less and devoted their savings to buying and paying off their homes. They also benefited from a series of lucky breaks. Most of them bought their first family houses cheaply at a time of prosperity, free education, wages growth and high employment. They then watched their assets inflate and often used the equity to re-enter the market, this time as investors, compounding the dilemma for everyone still trying to get on in the ground floor.

The boomers are now entering retirement. For many of them, this is a relaxing reward for a life well lived, financed by the pension, superannuation, capital-gains-tax exemptions and negative gearing, and the security of a family home that is relatively empty and has appreciated far beyond anything they could have imagined in their youth.

By contrast, millennials are racked by insecurity, indecision, frustration and the stress of foreseeing a major portion of their life’s income will probably be spent on rent — enriching passive investors, not themselves — or forcibly spent on superannuation. Household debt has never been higher. This is the millennials’ future.

Is it time that Australia evened up this intergenerational disparity? If solutions are not found for this problem, the economic and social ramifications will be immense.

In the first part of this three-part series, The Australian looks at the many causes of this problem. And while government and Baby Boomers have contributed millennials themselves are not entirely off the hook.

What’s it like to be a millennial who is continually told to move to a regional hub? Frustrating. Australia is the world’s sixth-largest country but it’s often treated like two cities and a whole lot of empty space. That’s not the case. Australia is full of beautiful towns and cities with affordable housing, and many young city-dwellers would pack their bags in a heartbeat. Unfortunately for young hopefuls, leaving the big cities is a lot easier said than done. A 20 per cent deposit is incredibly hard to achieve, but so are work goals if Sydney and Melbourne are not an option.