The rampant rises in property prices are taking an emotional toll on Australians, especially the younger generations who worry they will be permanently locked out of the housing market.
A survey by ME Bank asked 1,000 hopeful house hunters how the rampant rises in property prices makes them feel.
Of those surveyed, just over half (55 per cent) said they are worried they will be permanently locked out of the property market. The figure rises to two – thirds (68 per cent) for those in generation X.
But Ben Peters, who lives with his family in north-east Melbourne, hasn’t given up hope on his property dreams.
“I’ve worked hard for the past 10 years, including during my physiotherapy degree at uni, to save up a house deposit,” Peters told SCHWARTZWILLIAMS.
“Once I had a decent deposit I started looking for my home. I’ve actively been looking for the past four months and have bid on four properties but have yet to buy anything,” he said.
Peters said he consistently sees properties being quoted well below the final sale price.
“Before I’ve gone into auctions the estimated sales prices are generally within my budget, which does give me hope that I’ll have a chance, but when the bidding goes beyond that because of strong demand it can be disheartening,” he said.
But having some experience of the auction process under his belt, Peters now trusts his own judgment when he goes to an auction.
“I’m finding it’s important to take a realistic approach when it comes to auctions now, because as I’ve experienced, prices tend to go well above my budget,” he said.
Peters remains living with his parents while he pursues his property dream, a decision that has had a big impact on his lifestyle.
“While I’d love to have my friends over for dinner or drinks at any given time, living at home means this isn’t as easy. Not being able to buy a property has limited my independence.”
Peters said he is fortunate to be able to live at home, as it allows him to keep saving. He doesn’t have to rent, which would eat into his savings.
But he admitted that “no one wants to live at home with their parents forever.”
Peters said he is “anxious” to get into the market “sooner rather than later”, but said “it’s hard to decipher what my chances are”.
“I’m just hoping I can get in soon, before prices grow more quickly than I can save,” he said.
“I’ve been working hard and saving for about ten years, so even though I’ve had a few setbacks, I’m determined to achieve this dream.”
The ME Bank survey also showed that just under half of the respondents (46 per cent) said they feel inadequate because they don’t own a home. And a similar percentage (43 per cent) said they can’t imagine feeling “fulfilled” in the future if they don’t own a home.
One-third (38 per cent) feel “envious or jealous” when others reach the property ladder before them; that figure rise to half for Gen Y.
The ME Bank survey was conducted in with the help of psychologist Elizabeth Neal, who said negative emotions stemming from non-home ownership are understandable.
“Property is such a hot topic in Australia with constant reminders everywhere you turn, so it’s unsurprising many feel somewhat cynical and experience low self-worth as a result,” she said.
But Neal said that rather than wasting energy trying to keep up with others, “focus on the one thing you can control: your own financial wellbeing.”
ME head of home loans, Patrick Nolan, said, “For those still striving to get their foot on the ladder, it’s important to stay positive and to consider alternative strategies, like buying an investment property, a unit instead of a house, joining forces with friends or family, or looking to neighbouring suburbs where properties may be cheaper.”
Nolan said owning a home isn’t the only way to build wealth.
He said contributing more to superannuation, or using the monthly savings they might have been paid to a mortgage for another type of investment, would be good examples.
“Australians have become fixated by property,” but added that “for many people, not owning a home just opens another door.”
ME Bank is owned by industry super funds. The online survey was conducted nation-wide and was targeted at non-property owners.