Owning your own home is one of the surest ways of setting up financial success – but there is a reason younger generations may never fulfil the dream.
Future generations in NSW look unlikely to ever reach the record-setting home ownership rates of “Baby Boomers”, a new report has warned.
The finding, within the 2021 NSW Intergenerational Report, underscores that one of the state government’s greatest challenges going forward will be making sure every NSW resident has a roof over their head.
“What this report shows very clearly is that the average age for a millennial to get into the property market is much higher than it was for Boomers,” NSW Treasurer Dominic Perrottet told reporters.
“And these are challenges that need to be addressed, and I think housing is crucial and front-end-centre in this report.”
The report shows that 60 per cent of Baby Boomers, or people born between 1942 and 1951, owned homes by the time they reached 25-34 years of age.
For “Millennials”, born between 1982 to 1991, this dropped to 45 per cent.
“Furthermore, the decline in home ownership rates at younger ages has persisted through life, suggesting that the decline may not represent a delay but could instead be a permanent shift,” the report says.
“This decline has been driven by the increasing deposit barrier, as well as other social and demographic trends.”
The report, which looks at economic and social trends to predict what the state will look like in 2061, says the NSW population will likely be larger and older by then.
The coronavirus pandemic, though hopefully a distant memory by then, will have lasting impacts on future generations, the report’s authors predict.
One such impact is on population age.
“Short-term migration losses and lower fertility rates resulting from the pandemic will have ongoing impacts on the NSW population over the long term,” the report says.
“By 2061, the NSW population will be older and around half a million people smaller than it would have been without (the coronavirus pandemic).”
By the predicted population growth rate, there will be 11.5 million people living in NSW by 2061.
Mr Perrottet said speeding up the vaccination process and opening international borders would be a crucial way to tackle that issue.
“We can’t live like a hermit kingdom on the other side of the world here, we need to open up, we can’t have the virus continue to control our lives,” Mr Perrottet said.