Long-time housing policy critic,independent economist Saul Eslake,believes policy missteps over the past three decades have contributed to a situation that is undermining the living standards of future generations.
“I don’t understand why younger people today aren’t out on the streets,protesting against their parents and their grandparents for what they’ve done to the cost of housing in this country,” he says.
The Resolve poll found it is not just house prices. Forty-two per cent of renters said their rent had gone up this year,with an average increase of $77 a week. Another 20 per cent said their rent lifted in 2022.
Resolve director Jim Reed said high house prices and rents meant younger people were being squeezed by not buying and stretched if they did manage to purchase a home.
“They are buggered if they do and buggered if they don’t,” he said.
“My researchers in this area tell me that many young people have simply given up on the dream of owning a home,at least in their early careers,and some are even telling me that they are giving up on having a family because they can’t afford to look after themselves,let alone more mouths.”
The poll found wide support for a range of ways to increase housing affordability,but that support varies depending on how it affects survey participants’ local communities.
Seventy-two per cent of people support encouraging more homes to be built in new suburbs outside city centres.
Support fell to 51 per cent to relax planning rules to allow more homes outside a person’s local area. This dropped to 41 per cent if laws were eased to allow more homes in a person’s own suburb.
Labor went to the 2019 election with plans to restrict negative gearing concessions. The Resolve poll shows 49 per cent support for capping the number of investment properties a person can own while 54 per cent backed axing negative gearing for any properties bought after a certain date.
Productivity Commission chair Michael Brennan says the affordability of housing was hurting the overall economy.
“The ability to house people close to job opportunities,and for firms to locate close to skilled labour,is the equivalent of mining or manufacturing firms locating close to raw materials or port infrastructure – the key difference being that the location of skilled workers is based on individual choices and shaped by policy,” he said.
Housing is also affecting how economic policy in the country is set. The recentreview of the Reserve Bank found one of the reasons it did not cut interest rates in the period between 2016 and 2019 was due to concerns cuts would only increase the levels of debt carried by Australians.
That decision resulted in more Australians out of work.
“Higher interest rates likely contributed to below-target inflation and higher unemployment than otherwise,” the review found.
ANU demographer Liz Allen said the increased insecurity of housing was a factor in the delay of young Australians partnering with others which then affected decisions on when to start a family.
“If you have increasing housing costs then home ownership becomes less affordable,[and] that’s likely to have an impact on relationship development and the decision on parenting and number of children,” she said.
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The Grattan Institute’s Brendan Coates said young Australians faced a plight not all that different to the world portrayed by Jane Austen in books such asPride and Prejudice.
“The biggest issue is one of equality. We’re moving back to some sort of Jane Austen world where wealth is less about your work and innovation and more about how much land you have or inherit,” he says.