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Source:http://www.econ.mq.edu.au/Econ_docs/research_papers2/2005_research_papers/HousePrices.pdf
http://www.domain.com.au/group/wp-content/uploads/2015/07/Domain_House_Price_Report_June2015.pdf

Building and buying your home can be daunting, especially for first home buyers. First home buyers in Australia - Gen Y in particular - are increasingly struggling to get into the property market, perhaps more so than any other generation before them.

In fact, many are relying on their parents to help set them up for the future, with 41% of Gen Y living with their parents in order to save money. Of those who managed to purchase an investment property, over 70% did so with the financial help of their parents.

And house prices just continue to increase. On average, they rose by 6.8% percent in Australia’s major capital cities in 2014. In terms of affordability, Australia is ranked as the third most unaffordable major market, according to the 11th Annual Demographia International Housing Affordability Survey, in which 33 of the 51 markets were rated as severely unaffordable.

But it’s not all doom and gloom for those trying to enter the market, and according to history, the rise in property prices is bang on trend. Property prices in most capital cities across Australia have been steadily rising, and while your parents may have only paid $19,000 for an apartment that’s now worth more than $1 million, you have to remember that this is the norm. Everything increases over time, and property is no exception.

Which brings us to...

Generation why?

Most of Gen Y know that housing affordability is making it a lot more difficult to enter the market. And while this particular generation has often been referred to as the ‘entitlement generation’, this is a burden that those working hard for their money rebuff.

The majority of Gen Y are now in their early twenties and older. They’re trying to find job security in a market that doesn’t seem to offer it, most while studying on the side to further their education. The hours are long and the increase in wages generally doesn’t seem to reflect the increase in expenses. And this is why so many seem to struggle to scramble together a deposit for their first home.

Even further, Gen Y is now being told to work harder and lower their expectations to find a home. They’re being told to look in the outer, less desirable suburbs. Yet compare these ‘outer’ suburbs to those of the past. In Sydney, Redfern - less than 5 kilometres from the CBD - was once considered an ‘undesirable suburb’, and while the median house price in 2005 was around $550,00 it’s now home to multi-million dollar real estate. Today, it’s a stretch to find an affordable home within 30 kilometres of the CBD.

But does Gen Y really have anything to complain about? Did generations before have to go through the same problems and sacrifices just to gather a deposit for a home? Plenty of baby boomers didn’t go away on holidays or eat out, and simply played at home in the backyard just so their parents could pay the mortgage.

Furthermore, housing interest rates were exceptionally high, hitting 17% in 1989 and staying in the double digits until the early 90s. Compare this to the current interest rate and it seems that Gen Y has hit the jackpot. Many commentators say that Gen Y just want it all at once, without having the sacrifice - they want to leave near work, in established neighbourhoods with plenty of entertainment around, and they also want overseas holidays. This is while - some say - generations beforehand worked two jobs and on weekends, bought second-hand cars, and didn’t take annual leave just so they could put a roof over their heads.

So while Gen Y seems to be floating around feeling down as though owning a home is unattainable, it seems this is a problem many before them have experienced as well. The struggle is real, and it has been for some time, you’ve just got to adapt.

Yet, does Generation Y really have anything to complain about? Did generations before go through the same problems and sacrifices just to gather a deposit for a home? Plenty of baby boomers didn’t go on holidays, didn’t eat out and simply played at home in the backyard, just so their parents could pay the mortgage. Furthermore, housing interest rates were exceptionally high, hitting at 17% in 1989 and staying in the double digits until the early nineties. Compare this to the current interest rate and it seems Generation Y has hit the jackpot. Many commentators say Generation Y just want it all at once without having to sacrifice for it; they want to live near their work, in established neighbourhoods with plenty of entertainment around, and they want overseas holidays. While generations before worked two jobs, worked on weekends, bought second-hand cars and didn’t take annual leave just so they could put a roof over their heads.

So while Generation Y seems to be floating around feeling down on themselves that they can’t own their own home, it seems this is a problem many before them have experienced as well. The struggle is real and it has been for some time.