Millennials still strive for the Great Australian Dream of owning property yet fewer are able to achieve it, a new report has found.
The cost of living is the single most important issue ahead of the federal election this year for Australians aged 19 to 36, according to The Australian Millennial Report 2019.
It was closely followed by concerns about the economy, housing affordability and saving for a house, the report found, which surveyed more than 1200 Millennials across the country.
The traditional path of finishing university and starting full-time work no longer helped Millennials achieve success, according to Tom McGillick, Millennial demographer and co-author of the report.
“That’s not a straightforward path to prosperity any more … showing up every day doesn’t mean you’re going to make progress in this economy,” he said. “We’re experiencing much greater job insecurity.”
Older Millennials, aged 30 to 36, struggled with the cost of living compared to their younger counterparts, which was the surprising-yet-worrying trend, Mr McGillick said.
“You’re no more likely to have disposable income at 36 than at 24. There’s not anything to suggest that people in their mid-20s now are going to be that much further ahead in five years’ [time] either,” he said.
The prospect of owning property was a Millennial’s single most predictor of personal optimism, the report found.
All Millennial age groups associated success with increasing personal wealth, yet trying to save money or a home deposit was one of their greatest financial challenges.
“You were much more likely to rate your prospects of success if property was attainable,” Mr McGillick said.
“It is a huge deal in terms of the life of a young person and a young family.”
“Millennials are like every other generation,” Mr McGillick added. “They want the same thing. The idea of the Great Australian Dream is still there. We have seen our parents’ generation, the Baby Boomers, focus on property investment as wealth [creation] and security in retirement.”
Millennials in the ACT, Victoria and the Northern Territory were the most optimistic in attaining their goal of purchasing property for the first time. Millennials in Queensland and NSW were the least optimistic.
But falling prices in the housing market over the past year meant Millennials became more focused on saving for a property, which was encouraging, Mr McGillick said.
There was a marginal increase of 1.58 per cent of Millennials who took out a mortgage with a partner and 1.37 per cent increase for those who took out a mortgage on their own.
Seven per cent of Millennials returned to live at home with parents in order to save a deposit, up 5.31 per cent from 2018.
And some 13 per cent of Millennials were renting and saving for a deposit this year, up from 4.1 per cent in 2018.
“You see that more people in response to that [softening market] have entered into preparation for having a mortgage. There’s more people saying they have a mortgage or prepared to take out a mortgage,” Mr McGillick said.
The report also published a “smashed avo index”, which was a predictor of a Millennial’s chances of buying a home.
“If you’re the type of person who buys meals more often, it correlates with your chances of buying,” Mr McGillick said. Those who are complaining about housing affordability are in fact making sacrifices like not purchasing indulgent cafe meals.
“There is a very clear relationship between how easy it is you think to buy a house and buying smashed avos [in cafes].”