Young Australians first to fall behind on home ownership, report shows

Anglicare Australia’s Falling Behind report, released on Tuesday, finds that the share of 25‑to‑34‑year‑olds who own a home has slipped to an 80‑year low, a level last seen in the 1940s. The study points to a widening generational gap driven by higher house prices, escalating living costs and a shift in tax policy that favoured investment property.

Executive director Kasy Chambers said the economic foundations that once supported younger Australians have changed. “The economic foundations underneath them have shifted,” she told reporters in Canberra. “We need to look at taxing wealth the same way as income, because otherwise, what we’re seeing is that the wealth gets concentrated.” She added that the report calls for a “shake‑up to the Youth Allowance payment” to better match the cost of living.

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Older Australians, according to the report, appear insulated from these pressures. They earned wages during a period of relative job stability and accumulated wealth from investments that are taxed less severely than wages. In contrast, younger people are “absorbing the impact” with lower wages that do not keep pace with house prices and the cost of living, widening the gap between generations. Chambers described the situation as a “perfect storm” of insecurity, rising costs and extended periods of study.

The Australian government introduced a suite of tax changes this year aimed at curbing investment property advantages. Treasurer Jim Chalmers unveiled the sweeping reforms in the May budget, describing them as the “most important and ambitious” in decades and designed to make the system “fairer and stronger for workers, businesses, first‑home buyers and future generations.” Chambers welcomed the removal of tax breaks for investment income but said further measures were needed, including a potential wealth tax and reforms to the Youth Allowance.

Under the current system, the maximum fortnightly payment for a single person with no children on Youth Allowance is $677.20. The rate is below the poverty line, JobSeeker and the aged pension. “Rent isn’t cheaper when you’re 23. Groceries aren’t cheaper. Electricity isn’t cheaper,” Chambers said. “Yet young people are expected to survive on the lowest payment in the system.” The report also highlighted that nearly half of all low‑income renters under 35 are experiencing rental stress, and that not a single rental property across the country was affordable for a single person on the support payment.

A study by property data firm Cotality found that rents in certain Australian areas surged by as much as 80 per cent over the past five years, particularly following the lifting of COVID‑era rent freezes. Anglicare Australia reported that calls to its support lines frequently revolve around stress induced by housing insecurity and financial burdens, indicating that these young individuals, while studying and working, are grappling with a condition of economic strain that significantly differs from their predecessors.

Economist Angela Jackson of the Productivity Commission underscored that entering the housing market is now disproportionately expensive relative to income levels, especially for lower socioeconomic groups. The challenges faced by younger Australians raise concerns about equity and access to housing, Jackson noted. Demographer Liz Allen of the Australian National University drew historical parallels to the 1940s, remarking that while that era faced significant inequalities, policies then enabled greater accessibility to home ownership. “A lack of long‑term planning and a focus on immediate political gains have shifted the current housing narrative away from one that seeks to create opportunities for home ownership,” Allen said.

Anglicare Australia’s report calls for urgent policy reforms, including a wealth tax and a comprehensive review of the Youth Allowance, to level the playing field for younger Australians aspiring to own homes.