The great Australian dream of owning a home is slipping out of reach, with fewer than half of adults expected to own a home in the next few years, according to the nation's largest and most comprehensive household survey.
The Household, Income and Labour Dynamics in Australia (HILDA) Report, surveying 17,000 Australians, authored by the Melbourne Institute's Professor Roger Wilkins from the University of Melbourne, found that between 2001 and 2014 owner-occupied houses have declined by 3.5 percentage points.
Between 2002 and 2014 the proportion of households owning investment properties increased from 17 per cent to 21 per cent.
"That translates to 700,000 Australian homes. It is likely that in the next few years fewer than half of adults will be home-owners," Mr Wilkins said.
"This is likely to have adverse social consequences apart from economic. Home ownership can mean people are more invested in their local communities with a sense of belonging.
"I don't think there's a societal decline in interest to own a home, rather this trend is driven by price."
Victoria has had the biggest decline in home ownership.
That is becoming a stark reality for Melbourne's Tom Alomes, who has been looking to buy a house or an apartment for the past few years but is being priced out of the market.
The 26-year-old, who is sharing a rental house with two friends, said out of his close friends only one has cracked the property market, and those who own homes in his wider network have had help from parents.
"I've looked at areas beyond where I would really like to live and even considered an investment property but even then I will basically be mortgaged to the hilt," Mr Alomes said.
"I've reached the point where I have resigned myself to the fact that I will be renting for a lot longer and even might have to wait until I meet the girl of my dreams. Combining our incomes might be the only tenable way to do it. I know overseas in places like New York they rent until they die, but it's a mental shift I am slowly coming around to."
The report found the wealthiest households in Australia are couples over 65, who have seen a real increase in median net wealth of almost 70 per cent since 2002, helped by the surge in property prices.
However, nearly 70 per cent of all Australian households have received some form of welfare benefits between 2001 and 2014 and parents are paying more than double the fees for childcare than they were paying in 2002.
Despite a rise of almost 6 per cent in the number of households with private health insurance between 2005 and 2014, premium increases above inflation have led to people opting for basic policies with lower benefits.
Mr Wilkins said it could be assumed more people were taking up health insurance, be it at basic levels, not for the fact of having protection, rather being primarily motivated by reducing their tax liability with the Medicare levy surcharge.
This article was originally published by the Australian Financial Review on 20 July 2016. It represents the views of the author only and does not necessarily reflect the views of AMP.
If you’re hunting for a home, it pays to be on the front foot.