Australian millennials among world's worst for home ownership: HSBC survey

Australia is ranked among the world’s worst for young home buyers, falling far below average for home ownership, a report from HSBC released on Thursday shows.

After 9000 millennials were surveyed across nine countries, Australia was found to be close to the bottom of the list – only 28 per cent had bought a home. This compared to a global average of 40 per cent.

This was nearly the worst international result, escaping the dubious title by 2 per cent. In the United Arab Emirates, 26 per cent of millennials surveyed said they were home owners.

The country with the most first-home buyers was China, where 70 per cent of those surveyed owned a home. 

In eight of the nine countries included in the survey property prices had risen in 2016 and almost all home buyers across the board pointed to difficulties saving a deposit.

Australian millennials also put this at the top of their list, followed by 61 per cent who said they would need a higher salary before they could save or buy, HSBC Australia head of mortgages Alice Del Vecchio said.

“It is not uncommon to look for more than six months to find the right home, and often prices to enter the market have moved,” she said.

“The deposit for a home loan is the biggest initial cost of owning a home, but buyers also need to factor in the costs of stamp duty, legal fees, mortgage insurance, building inspection fees and in some cases renovation costs.”

Of those who did own real estate in Australia, a third had received help from their parents and 25 per cent had moved back home to afford to save. 

But despite the difficulties to get on the property ladder, 83 per cent had intentions to buy within the next five years.

“Despite the rising costs, millennials overwhelming want to own a home in Australia.

“The dream certainly isn’t dead. This research demonstrates that a lack of preparation and understanding of the realities of owning real estate however can stall or even deflate those dreams,” Ms Del Vecchio said.

A report from Mortgage Choice and Core Data earlier this year found 90 per cent of Australians no longer saw the typical Great Australian Dream as achievable, citing affordability as the top issue.

The majority of Australians found the market “too hot” due to rising prices and increased buying and selling activity, Mortgage Choice chief executive John Flavell said.

“We need to find a way to either cool the market down, or help Australians who are struggling to get their foot on the property ladder achieve their dream of home ownership,” Mr Flavell said.

First Home Buyers of Australia co-founder Daniel Cohen said “there is no doubting that home ownership is hard in Australia”.

“A lot of the new housing that is being built is targeted towards the higher end of living. We aren’t seeing enough new housing be built with entry level first-timers budgets in mind,” Mr Cohen.

“Under employment amongst the younger generations is very high. This means a lot of Australians aren’t working as many hours as they would like to work. This is hurting many young Australians ability to save a deposit.”

Nathan Birch, co-founder of buyer’s agency Binvested, said not all of Australia was too expensive for first-home buyers.

“If you look at capital cities out there, for example Melbourne, you can still pick up properties there for around $500,000 and definitely in Queensland around the Gold Coast and Brisbane,” Mr Birch said.

“If you want to look at Sydney, yes it will be a bit harder, but there are still opportunities. It depends if first home buyers are prepared to rough it a bit, as previous generations have done, or have something that is comfortable.”