Innovative solutions for first-home buyers
Rising costs and limited traditional financing options continue to lock hardworking Australians out of the market. These real-life implications are widening the gap of homeownership for downtrodden first home buyers.
The price of the typical home has grown much faster than incomes since the turn of the century, from about four times the median income in the early 2000s to more than eight times today – and nearly 10 times in Sydney, explains Brendan Coates, the housing and economic security program director at public-policy think-tank Grattan Institute.
'Rising house prices are pushing homeownership out of reach for many younger Australians. In the early 1990s, it took about six years to save a 20 per cent deposit for a typical dwelling for an average household. It now takes more than 12 years,' Coates says.
Grattan's analysis shows that homeownership rates are falling fastest for younger people, with 57 per cent of 30 to 34-year-olds owning their home in 2001, compared to 50 per cent by 2021. Just 36 per cent of 25 to 29-year-olds own their home today, down from 43 per cent in 2001.
Housing unaffordability is contributing to wealth inequality, which has been climbing for two decades. Coates says: 'The growing divide between the housing 'haves' and 'have-nots' is largely generational. Older Australians who bought their homes before prices really took off in the early 2000s have seen their share of the country's wealth steadily climb.'
To unwind inequality, we need to make housing less expensive, he says.
Coates blames a failure of housing policy. 'Australia's land-use planning rules are highly restrictive and complex. Current rules and community opposition make it very difficult to build new homes, particularly in the places where most people want to live and work,' he says.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Perth Now
2 hours ago
- Perth Now
Footy fans help consumer spending roar into growth
Footy fever has helped score a try for consumer spending, with a series of big matches prompting Australians to open their wallets, the nation's biggest bank says. The British and Irish Lions rugby union tour and the State of Origin rugby league decider helped push household spending up 0.8 per cent in July, according to the Commonwealth Bank. "Fans spent up on travel, entertainment and accommodation," economist Belinda Allen said. About 83,000 fans bought tickets for the State of Origin decider, which was won by Queensland, in Sydney on July 9. The British and Irish Lions tour included nine matches in six cities attended by about 452,000 people, with all but two played in July. Recreation spending was up 1.8 per cent and hospitality spending increased 1.5 per cent. Overall, 10 out of the 12 CommBank Household Spending Insights Index categories recorded growth in July. Motor vehicle spending rose 1.4 per cent, insurance increased 1.2 per cent, and health was up 1.1 per cent. "We have been anticipating a lift in household spending for some time, supported by rising real disposable incomes, increased household wealth, and a resilient labour market," Ms Allen said. Spending on education was flat, and utilities fell 0.5 per cent. The index shows spending has risen 6.4 per cent in 2025. The biggest gains occurred in the communications and digital, up 10.9 per cent; recreation, up 10.3 per cent; and hospitality, up 10.0 per cent. "Strong growth in spending on recreation and hospitality over the year underscores that consumers are prioritising experiences and being deliberate about their spending choices," Ms Allen said. "We expect a further pickup in spending through the rest of this year and into next, helping to drive a broader economic recovery." Education was the weakest category in 2025, down 1.8 per cent. Spending on utilities was up over the year due to cost-of-living energy subsidies being wound back. The bank expects the Reserve Bank to further cut the cash rate in November to 3.35 per cent. "A lower rate environment should help fuel consumer optimism and spending in the year ahead, and into 2026," Ms Allen said.
Sydney Morning Herald
3 hours ago
- Sydney Morning Herald
Australia news LIVE: Tax overhaul calls ahead of economic reform roundtable; Trump and Putin prepare to meet in Alaska
Latest posts Latest posts 7.02am 16 per cent of all six-year old boys on NDIS, new figures show By Natassia Chrysanthos Fresh data from the latest quarterly report from the National Disability Insurance Agency shows more than one in ten children between the ages of five to seven now rely on the National Disability Insurance Scheme. The figures also disclose that about 80,000 people joined the NDIS in the last 12 months, bringing the total number of Australians relying on the scheme to 740,000 people. The data is further proof that the scheme remains a lifeline for struggling children, with families seeking its support for their children's developmental delays. The scheme costs grew by 10.8 per cent last financial year and is still one of the budget's biggest pressures. Its rising cost is set to come into focus at next week's economic roundtable. 6.48am Teal MP calls for new income tax system ahead of economic roundtable By Shane Wright, Paul Sakkal and Emily Kaine Independent MP Allegra Spender has called for an overhaul of the income tax system in a plan she says aims to end 'intergenerational inequity' in the tax system. The plan would shift the weight of personal income tax from younger working people onto older people, aiming to reward people who work for a wage rather than sink money into property. The Coalition warned it would pull its support from next week's economic roundtable if the government raised taxes. Loading Tax is expected to be the most contentious item on the roundtable's agenda, with business groups already pushing back on a proposal from the Productivity Commission for a deep cut in the corporate rate for firms. Speaking on ABC's News Breakfast this morning, Spender said she was aiming to 'tilt the balance back to young people'. 'What we can do... is increase their access to their own money through not taxing them as much on their income and paying for that by reducing some of the concessions on wealth,' she said. 'We should be trying to reduce as much as we can that burden on younger people... we can't have a system that continues to focus its tax through increasing the burden on income tax and just through bracket creep.' 6.29am Welcome By Emily Kaine Good morning and welcome to the national news blog from the Sydney Morning Herald and The Age. My name's Emily Kaine, and I'll be leading our coverage through the morning. It's Friday, August 15. Here's what's making news this morning.
The Age
3 hours ago
- The Age
Australia news LIVE: Tax overhaul calls ahead of economic reform roundtable; Trump and Putin prepare to meet in Alaska
Latest posts Latest posts 7.02am 16 per cent of all six-year old boys on NDIS, new figures show By Natassia Chrysanthos Fresh data from the latest quarterly report from the National Disability Insurance Agency shows more than one in ten children between the ages of five to seven now rely on the National Disability Insurance Scheme. The figures also disclose that about 80,000 people joined the NDIS in the last 12 months, bringing the total number of Australians relying on the scheme to 740,000 people. The data is further proof that the scheme remains a lifeline for struggling children, with families seeking its support for their children's developmental delays. The scheme costs grew by 10.8 per cent last financial year and is still one of the budget's biggest pressures. Its rising cost is set to come into focus at next week's economic roundtable. 6.48am Teal MP calls for new income tax system ahead of economic roundtable By Shane Wright, Paul Sakkal and Emily Kaine Independent MP Allegra Spender has called for an overhaul of the income tax system in a plan she says aims to end 'intergenerational inequity' in the tax system. The plan would shift the weight of personal income tax from younger working people onto older people, aiming to reward people who work for a wage rather than sink money into property. The Coalition warned it would pull its support from next week's economic roundtable if the government raised taxes. Loading Tax is expected to be the most contentious item on the roundtable's agenda, with business groups already pushing back on a proposal from the Productivity Commission for a deep cut in the corporate rate for firms. Speaking on ABC's News Breakfast this morning, Spender said she was aiming to 'tilt the balance back to young people'. 'What we can do... is increase their access to their own money through not taxing them as much on their income and paying for that by reducing some of the concessions on wealth,' she said. 'We should be trying to reduce as much as we can that burden on younger people... we can't have a system that continues to focus its tax through increasing the burden on income tax and just through bracket creep.' 6.29am Welcome By Emily Kaine Good morning and welcome to the national news blog from the Sydney Morning Herald and The Age. My name's Emily Kaine, and I'll be leading our coverage through the morning. It's Friday, August 15. Here's what's making news this morning.
