The Grattan Institute notes a significant shift in the housing market, where house prices have surged at a much faster rate than income growth since the late 1990s. This imbalance in the housing market has made it increasingly challenging for young individuals like Erin and Jack to envision owning a home of their own. As a result, many young renters are resigning themselves to a future of lifelong renting, unable to save for the substantial deposits required to purchase a property.
Erin and Jack's generation face a stark contrast to that of their parents, with house prices skyrocketing at a pace that surpasses income growth. With the median dwelling prices in cities like Hobart and across Australia reaching staggering figures, the dream of homeownership seems out of reach for many young Australians. This disparity in wealth accumulation between generations has led to a growing concern about intergenerational wealth gaps and the challenges faced by young people in achieving financial stability and security.
Moreover, the rise in long-term renting among younger Australians has exposed flaws in the rental system, which was initially designed as a transitional tenure. Michael Fotheringham highlights the inadequacies of Australia's rental market compared to models in some European countries, where lifelong renting is more common and institutional investment in housing is higher. Calls for greater security and quality in rentals are becoming more prominent as young couples navigate raising children in rental properties without the stability and assurances that homeownership may provide.