High house prices denying young people secure retirement

Australia’s declining home ownership – concentrated among younger and poorer people – requires policy changes to either reverse that trend, or to ensure that people who do not own property can still have a secure retirement, analysts told a parliamentary inquiry.

House prices kept high by factors such as low-interest rates and favourable taxation policies for investors made residential property ownership an accepted source of wealth creation, but they also meant a growing proportion of people would never be able to own, CoreLogic head of Australian research Eliza Owen said on Wednesday.

“[If you consider] policies that preserved high values of homes in order to secure Australian wealth, you have to accept that what comes with that is declining homeownership for people in lower-income cohorts,” Ms Owen told into parliament’s inquiry into housing supply and affordability.

“And if that’s the case, how do you ensure their retirement? How do you ensure their long-term financial security? A few people have used the word ‘holistic’ in the course of this inquiry.

And I think that also includes things like alternatives to building wealth if you’re going to say to a cohort of people ‘You’ll never be able to own a home’.”

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