It’s no secret that it’s getting increasingly difficult for the younger generation to get onto the property ladder. What is perhaps a little less known though, is that it’s not just a UK issue. Across the globe young people in many developed countries such as Canada, Australia and New Zealand are also struggling to become a home owner.
According to an Australian Financial security study, reported on in the Guardian, if you don’t own your own home by the age of 45, the chances are, you never will. The report, published by The Swinburne University of Technology highlights that Australians still renting in midlife (45-49) are likely to continue to do so and be “highly impoverished” when they hit retirement. The overview of Australia’s housing security shows a widening gap between homeowners and renters, with renters being “particularly vulnerable to adverse life events” such as redundancy and marital breakdowns. The effects of these, without having any assets can be potentially insurmountable. Dr Andrea Sharam, one of the authors of the report says, “Once you have some equity behind you, the impact of a critical life event will not be as severe.”
Although this report focused on Australia, the same is being experienced across the Anglosphere due to affordability of housing, inequality and flat-lining household incomes making it difficult for those renting to save for retirement. The reports author Dr Sharam goes on to point out that if renters can’t break out of it early on, they may well find themselves trapped in the cycle.
The report also shows that the number of people in Australia that are experiencing housing insecurity and impoverishment when they reach retirement is rising. This is mostly renters living alone, with woman being particularly vulnerable as they have a lower income than men and are more likely to suffer a financial impact to “critical life events.” Those that are still renting past the age of 70 are twice as likely to woman and very poor.
This is definitely mirrored across the UK, with home ownership rates at their lowest in 30 years, housing supply at its lowest level in 14 years and , according to ‘This Is Money’, house prices having risen by a staggering 306% since 1995.
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