Is homeownership still the goal? 1 in 5 Aussies believe they will always rent
By Laura English,| 4 min read
When it comes to home ownership, it’s safe to say that most Australians believe the pros outweigh the cons. That sense of independence and financial freedom is a major drawcard for some. Not to mention the little things, like the freedom to renovate, or even drill some holes and mount a television on the wall.
Yes, home ownership has long been something that Australian renters would pine for, but as property prices rise and lending restrictions tighten, has that dream become fragmented?
Dreaming of purchasing a new home?
Find out how much you could borrow with our calculator.
When we surveyed 1,058 people on their attitudes towards renting a huge one in five Australians, (19.2 per cent) believe they will always rent.
Does this mean that many Australians don’t want to rent, or they feel priced out of the housing market?
Well it's probably a bit of both. A growing number of people view renting as a more practical solution. Germans have historically been content to rent throughout their lives with just 46 per cent of households owning a home, this is in comparison to Australia’s 65.5 per cent rate of home ownership.
Renting can come with many benefits, including less responsibility, leaving the payment of taxes and maintenance and property repairs to the owner, and the freedom to invest your savings elsewhere.
With that said, many Australians view homeowner as the finish line. Laura Prael, Director of LEP Digital, bought her first home on Sydney’s North Shore in 2014, “I saved for the deposit over 12 months. I sold my car (that I owned outright), and sold things in my home on eBay (clothes, furniture). I also stopped spending money on buying clothes and going out. I made my morning coffee at home and brought my lunch to work with me every day. It was a tough year, but it was worth it to see my savings grow. After living in it for a year, I moved out, and turned it into an investment property for tax purposes which has helped me to keep up with the loan repayments.”
Ms Prael bought her second apartment on the Central Coast this year, “I used some of the equity on the first apartment and savings earned over a year of working hard in my own business. We only just scraped in to get the loan by getting rid of our credit cards and selling a car to get out of that debt.”
Got your eye on a property down the street?
Find out how much it's worth with our free property report.
By state, Western Australians (49.5%) were the most confident they’d cross the homeownership finish line before 35. This may be as a result of their average and median salary combined with the drop in house prices in recent years.
New South Wales, Queensland, and Victorian residents were the least optimistic they’d stop renting before 35 and they also have the highest median house prices in their cities (aside from ACT who are nestled after Victoria and before Queensland with a median of $591K).
One in five Gen Ys say they’ll ‘rent forever’
Gen Ys are arguably the ‘key players’ in the home ownership debate. While we did find that nearly one in three millennials believed they’d buy a home between 26 and 35, one in five think they will ‘rent forever’.
When you dig a little deeper, it’s clear there’s a shift among Gen Ys and their priorities. More and more young Australians are saving for overseas trips in lieu of a house deposit, suggesting that Gen Ys value experiences over home ownership.
Calculate your monthly home loan repayments
Find out if you can save with a lower interest rate.
Young Aussies are still optimistic when it comes to home ownership
Despite the harsh buying conditions in some of Australia’s capital cities, one in four Aussies do not expect to rent past the age of 35, while a further 17.7 per cent expect to buy a home before 25. This suggests many Australians are optimistic and believe they will achieve the Australian dream in their twenties and early thirties.
The home ownership landscape has changed and with all of the doom and gloom in the media, some homeowner aspirations may be squandered. With small shifts in your lifestyle and finances it’s still possible to break into the housing market. It’s never too late to start saving and making positive changes to work toward your home owning goals.
How much can you borrow?
Find out what your monthly repayments might look like.
An introductory rate is a promotional interest rate that lenders use to attract new customers. It is sometimes referred to as a ‘honeymoon rate’. An introductory rate is only for a limited period of time, typically 12 months, after which the interest rate on the loan typically rises and reverts to the lender’s standard variable interest rate.
Comparison rates
Comparison rates above are based on a home loan of $150,000 for 25 years. WARNING: The comparison rates are true for the example given only and may not include all fees and charges. Different terms, fees or loan amounts might result in a different comparison rate.
IMPORTANT INFORMATION: Any information provided does not constitute an offer of credit and are examples of what may be available to you based on the information available. It does not take into account any product features or any applicable fees. Lending criteria and the basis upon which we assess what you may be able to afford may change at any time without notice. Top rates include lenders who are on our panel and are then defined by the circumstances provided by the borrower. For Fixed Rate home loans, break costs may be payable which can be significant if you change the whole or part of your fixed rate loan or where additional or early repayments are made during the fixed rate period.
All applications are subject to lender assessment and approval. Cashback offers may be provided by some lenders and may only be available for particular products, terms and conditions apply.
We are committed to protecting customer privacy and do not sell customer information, please refer to our Privacy Policy for more information.
Our mission is to change the way Australians get home loans by providing a faster, smarter and more secure home loan experience designed around the customer’s convenience and needs. We compare thousands of home loans from over 25 leading lenders.
Lendi Group Pty Ltd, which is the ultimate holding company of the Aussie and Lendi businesses, is owned by numerous shareholders including banks such as CBA, 1835i (ANZ’s external venture capital partner) and Macquarie Bank, the Lendi founders and employees, and a number of Australian institutional investors and sophisticated investors including UniSuper.
