Priced out of home ownership, could an entire generation be stuck renting forever?
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.