ISCOVER
The vast majority of banking and finance executives believe the property dreams of young Australians could be drifting further away, according to a new survey.
Australians under the age of 35 are facing increasing barriers to buying a home, according to research from loan tech provider Lextech.
In a survey of more than 100 banking and finance executives conducted at the Customer Owned Banking Association’s (COBA) annual conference in Brisbane (10–12 August), Lextech found that 85 per cent believed under-35s face increasing barriers to buying a home.
The concerns come amid escalating house prices and high serviceability hurdles, which have priced some first home buyers out of the market.
Only 11 per cent of respondents disagreed that young Australians faced growing home ownership barriers, reflecting widespread concern across the sector.
Home ownership among younger adults has been falling in the past few decades, with home ownership among 25- to 29-year-olds having dropped to 36 per cent, according to the last census (conducted in 2021), down from 50 per cent in 1971. Similarly, home ownership among 30- to 34-year-olds has dropped from 64 per cent in 1971 to 50 per cent in 2021.
The Lextech survey also found strong expectations that an interest rate drop by the Reserve Bank of Australia (RBA) would stimulate new lending, with 79 per cent of respondents saying a cut would drive loan activity, compared to just 16 per cent who believe it would not.
Indeed, new data released by the Commonwealth Bank of Australia (CBA) shows that pre-approval application numbers increased by 12 per cent following the second rate cut of the year.
Peter Maloney, CEO of Lextech, said the survey results highlight the urgency of the housing affordability challenge.
“The notion that Australia faces a systemic housing affordability challenge is widely shared by banking and finance professionals. With less than 5 per cent of existing homes changing hands each year, it’s clear that younger buyers are confronting significant hurdles,” he said.
“Federal and state government initiatives providing financial support to first home buyers are critical, as well as improved planning laws for faster land releases, because there is a massive wave of 20- to 35-year-olds that will either realise the great Australian dream of home ownership or be persistently trapped in the rental market.
“Without continued targeted action across the nation, we risk leaving an entire generation behind in the property market.”
Housing affordability has been a core focus for the Albanese government, with the recent economic reform roundtable seeking to address housing affordability and supply issues.
Following the three-day roundtable last week, Treasurer Jim Chalmers confirmed that the government would look to speed up home building, with a particular focus on simplifying the National Construction Code and streamlining planning approvals.
This aims to help meet the government’s target of 1.2 million new dwellings by 2029 and to make housing more accessible for Australians.
Growing affordability pressures have seen changing dynamics in the property market, forcing an increasing number of first home buyers into considering investment properties over owner-occupied homes as their entry point into the property market, according to industry figures.
[Related: Rentvesting appeal rises as first home buyers feel affordability squeeze]
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