Younger generations are finding it increasingly difficult to crack the housing market. Photo: Alexander Raths
It's a worldwide phenomenon called ''Generation Rent'', and it is happening in Australia.
People of all generations, but particularly Generation Y and Generation X, are being locked out of home ownership, says Dr Wendy Stone, director of the Australian housing and urban research institute, Swinburne research centre.
''Lockout and blocked aspirations are happening at all ages, although it can be seen most significantly among the young.''
While the term ''generation rent'' is increasingly used overseas to talk about young people who will never be able to afford to own their own homes, permanent renting was becoming a way of life for all generations in Australia. Of the 1.8 million households who rent, a third have done so for more than 10 years.
Families and older people are increasingly ageing through the rental market, moving on average as many as three or more times in five years, Dr Stone says.
And for generations Y, X and Z (those born from the mid-1990s) the chance of moving out of private rental accommodation and buying a home is dwindling.
''Generations X and Y unmet ownership aspirations have potentially significant, yet little understood, social and economic implications for employment, location and family formation decisions and housing assistance needs through working-age years.
''Initial entry, difficulties in saving a deposit while paying rent and escalating house prices are a major problem for younger generations. However, we also find that people who 'fall out' of home ownership due to separation/divorce, ill health or other disruptions are also facing problems in re-entering the market,'' she said.
''All in all, Australians no longer have simple 'linear' housing pathways starting from the parental home and ending in home ownership, which can be downsized in old age for retirement housing and support for adult offspring.''
Currently, there is little attention to the experiences of Generations X and Y as they adapt to a changing housing environment, or to the ''voice'' of Generation Y - the generation arguably most affected by intergenerational inequity - about their current and future housing needs.
As families find it harder to scrape together a deposit, and banks get tougher with lending, renting is becoming a permanent way of life for many people.
For the Schickingers, a Sydney family who migrated from Germany a decade ago, renting is the only way they can afford to stay in the area where their two sons now go to school.
They've moved three times within the Coogee/Randwick area, paying from $600 to $800 in rent a week, said Birgit Schickinger, 42. ''We're renting a great place. It's the bottom floor of a duplex, which is quite large with a wraparound garden,'' she said.
Buying something comparable would cost at least $1.3 million.
She didn't worry about having to move because the family had a great relationship with their landlords, who lived next door.
Reports on renting by AHURI find Ms Schickinger is lucky.
- 40 per cent of people who live in private rental have had to move three or more times in the previous five years.
- 23 per cent of these moves were forced because they were evicted or they couldn't afford the rent.
- 30 per cent of rental households say they're likely to move again within the next 12 months, yet 52 per cent say they don't want to move.
Compared to 1981, the number of families with dependent children in the rental market has grown, increasing from around 30 per cent of all renters to nearly 40 per cent .
Nearly half of all renters are in the lowest income groups.
''Growing up in private rental and having a short-term lease, and having to move three or four times is a very undesirable childhood, and it is a poor way to house Australian children and expect good outcomes,'' said Dr Stone.
While long-term renters (particularly those renting more expensive properties such as the Schickingers) have more stability than lower-income renters, the private rental market is characterised by insecurity.
Even long-term renters move twice as often as home owners.
One of the fastest growing trends was the increased number of people who were ageing in the rental market. Around half of all long-term renters were aged 30-44, and 30 per cent were aged 45-64 years.
Dr Stone said more needed to be done to provide renters with long-term leases and security. She cited an innovative program developed by the Australian Defence Force (ADF) Housing which guaranteed investors 10 years of rental return. In exchange, the ADF promised to maintain the properties, pay the rent if the tenant defaulted and find appropriate tenants.