According to a property studies expert, there needs to be a shift in the attitude towards home ownership in the wake of the new federal budget.
Whilst the issue of housing affordability is often cited as a major concern for millennials, there are no major measures in this year’s budget to address it.
Curtin University Senior Lecturer in property studies J-Han Ho said millennials need to think about whether entering home ownership is financially beneficial in the first place.
“When you buy a house and you go into a 30-year mortgage it’s like going to jail… when you’ve got a mortgage you have no money to go out, to buy nice clothes, and you don’t get to see your friends because you’re working really hard to pay off this house,” he said.
“If you look at what’s happened in Perth, a lot of people in the last seven to 10 years have lost every single cent of their [house] deposit.
“They’ve bought a house 10 years ago for the same price it is [worth] today, and you’re thinking, ‘well I put $100,000 down and I’ve been paying a mortgage, but I would have possibly been better renting a house and that money could’ve been used for other investments that could get me further in life.'”
A $1.6 billion measure in Tuesday’s budget means older Australians can remain at home longer, with an additional 14,000 high-level home care packages made available, as well as offering home owners a higher pension rate.
This will work against first-home buyers, as it slows down the availability of housing.
Mr Ho also said with the current job market requiring flexibility, it’s not as beneficial for young people to invest in a house.
“When you buy a house, you’re locked down location wise, ball and chain, you can’t move to Sydney when you’ve bought a house in Perth and you’d be too worried because it’s your most expensive investment ever,” Ho said.
“Home ownership is a sign of success, a sign of status, but is it really successful financially?”
Ho also said now is the time to rent, with houses in central locations being the most affordable they’ve been in 15 years.
“I’ve seen some houses that used to rent in South Perth for $450 a week and now rent for $280,” he said.
Hear more from J-Han Ho here: