Gen Ys shut out of home ownership

One in three Gen Y prospective first homebuyers say they will never be able to afford to get into the property market, according to the latest Bankwest/Mortgage and Finance Association of Australia (MFAA) Home Finance Index.

More than half of Gen Ys now say they are postponing plans to buy a home due to the amount of debt they would need to carry, up more than 10 per cent on figures from a year ago.

“We have never seen such pessimism amongst prospective first time buyers throughout the past five Indexes,” said Bankwest Retail chief executive Vittoria Shortt. “70 per cent of respondents were very concerned about the level of debt they will be committed to if they buy a property.”

Rising prices and interest rates and tighter lending criteria have combined to shut younger home buyers out of the market, with many resorting to back-to-basics savings plans in an attempt to enter the property market, according to MFAA chief executive Phil Naylor.

“Our research showed that 25 per cent of prospective first time buyers are looking to live at home in order to save a deposit,” he said.

Of those delaying home purchases, fewer are asking families to help fund a home loan deposit. That figure has fallen from 20.4 per cent to 14.7 per cent.”

Prospective homebuyers in Western Australia were the most optimistic with more than 50 per cent believing they would be able to buy a home, compared to a national average of just 43.7.

With the First Home Owners Grant being wound back and interest rates rising, more than three quarters of respondents felt the Government was not doing enough to help them enter the market, up from 62.8 per cent a year ago.