With asset values around the world having been pushed up by a combination of ultra-low interest rates and quantitative easing, it is increasingly difficult for young people everywhere to get a foot on the housing ladder.
The UK, Canada, the US, Australia and New Zealand; it’s the same story. According to a recent Australian Financial security report, reported in the Guardian newspaper, if you don’t own a home by 45, you probably never will. Australians still renting in midlife (45 to 49) are likely to continue to rent and be “highly impoverished” in retirement says the report.
The report, which is published by The Swinburne University of Technology, paints a pretty grim picture of Australians’ housing security, showing a widening gap between homeowners and those renting in the private rented sector (PRS).
Renters, the report says, are “particularly vulnerable to adverse life events”, such as marital break-down or job redundancy, with devastating and potentially insurmountable long-term effects.
Although the report is focussed on the Australian experience, pretty much the same is true across the Anglosphere, with Housing affordability, inequality and flat-lining household incomes making it very difficult for tenants to save for retirement – the housing market across the piece being, the report claims, itself a “source of impoverishment”.
One of the report’s authors, Dr Andrea Sharam, a research fellow at the School of Arts, Social Sciences and Humanities has said, “If they can’t break out of it early on, they’re going to be trapped in that cycle,” The number of Australians – overwhelmingly renters living alone – experiencing housing insecurity and impoverishment in retirement is increasing.
Women, it seems, are particularly vulnerable as they not only tend to be poorer than men, but are more susceptible to having their wealth impacted by “critical life events”. Tenants still renters over the age of 70 are twice as likely to be women and very poor, the report concludes.
Dr Sharam and her co-authors are calling for substantial investment in affordable housing to provide non-homeowners, those who are not eligible for social housing but cannot afford to buy themselves, with more options and security in later life.
“If such housing is not forthcoming over future decades, Australia will have a sizeable minority of its older households in an unsustainable housing position,” says Dr Sharam.
This story and others from around the world underline the fact that the UK is not alone in its housing market troubles; the problem is pretty much exactly mirrored around the globe.
Home ownership difficult around the world https://t.co/fiyMtb9j6O
— LandlordZONE (@LandlordZONE) October 11, 2016