The Challenge of Home Ownership in Australia
An alarming statement by an industry expert has highlighted the uphill battle faced by young Australians striving for home ownership, which now often requires financial aid from parents, striking it rich in business, or leveraging earnings from digital platforms like OnlyFans. The expert defined "mortgage stress" as situations where home loan repayments eat up more than 30% of one's income—a scenario that, according to Redbridge, nearly half of Australian respondents are currently experiencing.
The Impact of Economic Factors on Housing Affordability
Over the past fifteen years, the housing affordability crisis in Australia has significantly deepened. Factors such as inflation, stagnant wage growth, and a notable decrease in new home constructions have pushed the age when the average Australian can afford a home deposit from 23 to 32. The scarcity in new home constructions is attributed to high interest rates and bottlenecks in the construction sector.
Sydney's Soaring Real Estate Prices
In Sydney, individuals, couples, or families need to earn a yearly income of at least $293,578 to afford a home at the median price of $1.36 million without succumbing to mortgage stress. For a median-priced unit, which costs $767,250, a salary of $165,623 is necessary. These figures starkly contrast with Sydney's average income of $98,218, highlighting a significant disjunction between average earnings and the cost of housing.
Darwin as an Outlier in Affordability
Meanwhile, Darwin stands out as the most affordable city, where the required annual income to manage mortgage payments beneath the 30% income threshold is $124,339—only 1.3 times the city's average salary. Despite its relative affordability, the substantial gap between income and housing prices persists as a considerable barrier in Australia.
Unconventional Methods for Home Buying
Amid these economic conditions, some young home buyers are resorting to unconventional methods to accumulate enough funds for real estate investments. An anecdote shared by an auctioneer revealed that real estate agents have noted some clients using earnings from OnlyFans, a popular content subscription service, to supplement their income for property investments.
Advocating for Policy Changes
This dire situation has prompted Greens Housing spokesman Max Chandler-Mather to call for urgent governmental interventions to address the imbalance. Chandler-Mather advocates for reforms to tax benefits like negative gearing—a scheme that currently favors property investors over first-time home buyers. Such reforms are deemed essential to narrow the increasingly wide gap between income and real estate prices, aiming to make home ownership more attainable for a larger number of Australians.
