May 25, 2022

Is the Australian Dream still a reality?

One of the hottest issues of the 2022 election was home ownership. All sides of politics put forward new policies to address calls to make buying a house more achievable.

This issue is nothing new: buying a home has been a hot topic on Edentify’s Café Chat for a while now. We asked our Caféstudy community if they thought buying into the Australian Dream was still possible.

The Problem is Real

One thing that virtually everyone agrees is that house prices in Australia are high and getting higher, and that makes buying a home harder. This is particularly clear among younger people, as well as those on lower incomes, who see their dream of home ownership slipping further and further away. This is exacerbated by high rents, which make saving for a deposit nearly impossible.

The prices of homes have skyrocketed over the last couple of years. Even for house and land packages that are available are quite expensive and out of most peoples price range.

Home ownership for the young adults is out of reach for most due to exorbitant prices. House prices in mid-western Sydney are over the million dollar mark. If the young couple desire children, then I think they would have to make the difficult choice of home ownership or a family.

Property prices are increasing to rise in a disproportionate way to incomes, and therefore the average Australian is being priced out of the property market in capital cities of Australia.

When we purchased our first home about 49 years ago we paid something like 7 times my gross annual salary. It was a modest 3 bedroom single storey home in an average-income suburb. To purchase that same home today I would need to be earning over $200,000 a year.

We live in a small regional NSW town on the Snowy Mountains. Property prices have always been very affordable and great entry points for families. In the last six months property prices have gone absolutely nuts with covid and the work being done by Snowy Hydro and Future Gen. homes purchased for $180,000 ten years ago are now being valuable upwards of a million.

Haves and Have-Nots

However, not everyone believes that the dream is over, and many recall the sacrifices they had to make when they bought their first home. This might have been choosing to live further away from the city, buying a home in need of renovation, or choosing to give up other things in order to save and pay off their mortgage.

Sacrifice is an essential element to achieving any dreams. I lived with near $0 entertainment expense for the first 12 years of my married life. Unfortunately, not many people are willing to do this.

I do believe it is still achievable but it is going to take more work and sacrifice.

Of course it’ll be hard just as it’s been hard for generations before them - that’s not a reason to not try and come out as winners. Is home ownership still a mark of success or is it outdated? It is a mark of setting a long term goal that secures your future and seeing it through - it’s been that for us and hopefully for our kids too.

Overstretching to purchase property and going into heavy debt isn't the Australian dream; buying within one’s means is the way to go, starting off maybe not in your dream home, but working towards it over time.

In many ways this issue can be clearly divided into the Haves and the Have-nots, and those who already own their home often may be surprised at the challenges facing first home buyers today.

The Reality of 2022

It seems that, while those who have already bought clearly made sacrifices to do so, some of the issues faced by today’s aspiring home buyers make taking the leap uniquely difficult. With house prices even outside capital cities increasing faster than wages, along with an ever-increasing cost of living and poorer job security, the idea of buying a home is likely to remain a dream for many. Many people have given up hope.

I accepted my dream was lost years ago. When I envisioned owning my own home, I naively expected I could save a small deposit, work full time and buy near my family. I soon realised that the costs were rising far faster than I could save and earn.

I certainly dream of owning my own house, but as a 21 year old I feel like that may never happen, as by the time I will have saved enough prices will be exponentially higher.

Home ownership is still the great Australian dream but I think it is becoming unreachable. There are no permanent jobs any more, they are nearly casual or part-time. The job industry has become very unstable and you don't know if you will even have a job tomorrow.

So is home ownership achievable? Well yes, if you have a better than average income, live a below average lifestyle to save a deposit and move to an area far away from your job, you too could be the proud owner of an astounding amount of debt. But if that sounds like the 'Great Australian Dream' I'd hate to see its nightmare.

So where to now for home ownership in Australia?

It’s clear that the Australian dream is still important to a lot of people. What is also clear is that it is much harder today than it has been before. For many people, the kinds of financial sacrifices required to make buying a house possible for their parents are not enough today, and many are giving up hope that it will ever happen.

A new government brings the opportunity for change. The challenge for this new government will be to keep the possibility of home ownership alive for all Australians, not just the wealthy.

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