Home Ownership Delayed to Later in Life

According to a new study from Roy Morgan Research, Australians are putting off key life events due to increasing economic pressures and changing education and social patterns. Not only are young Australians living at home for longer than ever before, home ownership is being delayed and fewer people are owning their home outright before retirement. With an increasing number of people living at home and renting until their 40s, it seems it's never too late to get your foot onto the property ladder.   

According to Michele Levine, CEO of Roy Morgan Research, "Australians are living at home for longer, a significant proportion are now renting well into their 40s, and it is only near retirement that a majority of Australians are finally owning their own home after a lifetime of work." Trends are changing quickly, with 58% of 18-19 year olds living at home today compared to 54% in 2007. People continue to live at home well into their 20s, with 28% of 22-24 year olds living at home today compared to 24% ten years ago, and 16% of 25-29 year olds still at home compared to just 12% in 2007. 

Financial pressures and social trends are both influencing these changing patterns, as homes get more expensive relative to income and education stretches beyond the early 20s. "The changing shape of Australia is driven by two demographic trends - millennials are staying at school or in education longer and staying at home or in shared accommodation while they do that; baby boomers, rather than paying off homes as quickly as possible, are using the equity in their homes to renovate, upgrade, invest or finance whatever other activities that want to engage in." said the Roy Morgan report, adding "The increasing price of housing relative to incomes - especially among younger Australians, is only part of the story.”

An increasing percentage of home owners are buying property in their 40s, with just 33% of 30-34 year olds having a mortgage today compared to 43% ten years ago. The huge change in home ownership rates in the 30s is smoothed out later in life, however, with 43% of 35-39 year olds having a home loan today compared to 51% in 2007, 51% of 40-44 year olds having a home loan today compared to a similar figure a decade ago, and 52% of 45-49 year olds having a home loan today compared to 50% in 2007.

With people getting onto the property ladder much later in life, it's no surprise that full home ownership is also being delayed. According to Roy Morgan Research, only 12% of 40-44 year olds currently own their own home, compared to 18% in 2007. This discrepancy is even bigger later in life, with just 18% of 45-49 year olds owning their homes outright compared to 28% in 2007. In fact, the majority of Australians do not own their home outright until they are aged 60-64 years old, with 60% achieving full home ownership close to retirement age compared to 2007 when 55% of 55-59 year olds owned their home.

 

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