Rising house prices and sluggish wage growth mean many young people have given up on the idea of ever being homeowners. A generation of life-long renters could have a big impact on the retirement system in the future, leading to calls for Australia to adopt a different approach to the rental market.
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00:00Erin and Jack love living in Tasmania's historic Battery Point.
00:06They've found an affordable rental, but the working couple could never afford to buy in
00:11the affluent suburb.
00:13Even surrounding Hobart is out of reach, where the median dwelling value is close to $647,000.
00:20Nationally, it's more than $798,000.
00:26I'm smiling, but we've got no hope really, yeah, of being able to afford a place of our own.
00:32It was a different story for their parents' generation.
00:36Up until the late 1990s, house prices broadly tracked income growth.
00:41But between 1992 and 2018, they grew at almost three times the pace.
00:48The wealth gap between generations in Australia is an increasing problem.
00:53It means many young people see their future as lifelong renters.
00:58One of the challenges is we have a rental system that's really not designed for renting long term.
01:03Rentals are regulated at a state and territory level,
01:06which means different rules around things like no-cause evictions and caps on rent rises.
01:12If you have incentives for having a tenant for five years or ten years,
01:17that's great because you can make a bit of a life plan, but at the moment that doesn't exist.
01:21It's predicted home ownership rates for over 65-year-olds will have fallen from close to 80% to 65% by 2056.
01:31But if you're not a homeowner, you've got to pay rent in retirement,
01:33which means your living expenses are much more expensive than someone who's paid off their mortgage.
01:39There are government plans to build more affordable rentals and boost housing supply,
01:44and National Cabinet is working on guidelines for a better deal for renters.
01:50But not everyone's optimistic.
01:52Incredibly bleak.
01:54I think that there is a huge issue in general across Australia where housing is seen as an asset, not a human right.
02:02Young people facing a very different future to the generation before.