- Report finds declining home ownership rates, employment instability, and difficulties saving for a deposit, making it increasingly difficult for young people to enter the property market
- Government interventions, including stamp duty concessions and first home owners grants, have been criticised for being ineffective
- Rent-to-buy platforms have emerged as viable alternative solutions to bridge the gap between renting and owning
According to the Australian Housing and Urban Research Institute (AHURI) it is no longer feasible for many young people to purchase a home by themselves, with pathways such as rent-to-buy providing alternative routes to homeownership.
The AHURi Pathways to home ownership in an age of uncertainty report, found many younger Australians believe the only way for them to purchase a home is with their parent’s help.
The study found 40% of first homebuyers are expecting to rely on the bank of Mum and Dad, however, there is also the risk that that option might not be there in the future.
The report pointed to ineffective government interventions forcing Australians to increasingly explore alternative pathways to home ownership.
Failed government policies
Government interventions, such as stamp duty concessions and first homeowners grants, were also criticised for merely creating the appearance of progress while ultimately worsening the issue.
The study also shows just how important family wealth and support are in helping young people enter the property market.
While, bank restrictions, contribute to the obstacles faced by homebuyers with attempts to control the mortgage market being seen as counterproductive.
In response to these challenges, rent-to-buy platforms have emerged as viable solutions for Australians, thanks to technological advancements the report said.
Rent-to-own housing has been identified as a modern solution to bridge the gap between renting and owning. This approach provides individuals with housing, a sense of ownership, and the opportunity to start building equity.
Past discussions and incentives around the build-to-rent sector were seen as steps in the right direction, but those initiatives have since lost momentum the report said.
Rent-to-own could help
PublicSquare CEO, Dean Arnold said homeownership pathways such as rent-to-buy platforms can also help.
“Government interventions do little to solve the problem. For owner-occupiers, providing concessions or options around stamp duty is a nice to have, as are free handouts in the form of kickbacks to builders, etc. However, this is a non-nuanced approach and just an easy way to make it look like something is being done to single-issue voters.”
“Anything that makes it cheaper to enter the property market makes property more attractive and thus more expensive, exacerbating the real issue of homebuyers facing restrictions placed by banks in the form of deposits, LMI, and eligibility requirements.”
Given the current rental crisis that is gripping the nation, Mr Arnold believes rent-to-own solutions will help younger Australians.
“Renting is the real issue of the day, as well as mortgage serviceability in response to rising rates. It is good that politicians are not looking to landlords to pick up the bills anymore, as that never made any sense.”
“Rent-to-own housing is a straightforward modern solution for bridging the gap between renting and owning. It gives people housing, a sense of ownership and allows them to start building equity. Some of the previous discussions and incentives around the build-to-rent sector were heading in the right direction, but they are being wound up now.”
