National housing crisis driving 2 in 3 Millennials and Gen Z to choose travel over property ownership25 January 2024
The median house price across Australian capital cities is now $937,592. The price hikes increased the strain on already cash-strapped first-home buyers, whose property ownership rate is already at a decade-low.
In light of soaring house prices and Consumer Price Index inflation of 5.4 per cent (double the national target), research from award-winning travel insurance provider InsureandGo has revealed 71 per cent of under-30s and 65 per cent of 31-50-year-olds would rather travel than buy a house over the next 12 months.
The findings were revealed in a survey of an independent panel of 1006 Australians commissioned by InsureandGo. The results showed a direct correlation between age and the desire for property ownership in the current market.
Nearly three in four (71%) of under-30s respondents said they would spend their money on travel rather than property in the next 12 months. In comparison, 65 per cent of 31-50-year-olds and 51 per cent of over-50s said the same.
The average national mortgage is now $599,000, which equates to monthly repayments of about $4,234. On the other hand, the average Australian spent $974 on a single holiday over the year leading up to September.
InsureandGo Chief Commercial Officer Jonathan Etkind says for an increasing number of young Aussies, home ownership is becoming a pipe dream – and InsureandGo’s research shows it is significantly shaping spending habits.
He says: “When forced to choose between an eyewatering mortgage and a travel experience, Millennials and Gen Z Australians are opting for the latter, and this is largely in response to the housing crisis. This trend is fuelled by the ‘experience culture’ that erupted over the past decade and saw young Aussies eschew spending money on ‘stuff’ to making memories instead.”
From the survey, InsureandGo found that 81 per cent of over-50s Aussies are homeowners, compared with 45 per cent of people 18-30-year-olds and 75 per cent of 31-50-year-olds.
Statistics reveal the likelihood of owning a home at age 25-30 has decreased for each generation, while also noting last year that travel had driven an increase in spending across Aussie households.
“I believe the pandemic also has a role to play with these trends,” Jonathan says. “For many of us, being holed up in our homes for extended periods between 2019 and 2021 and being unable to travel sparked some seriously itchy feet. Combine that with skyrocketing property prices, and you’ve got a generation of younger Aussies who have perhaps been taught to rethink the great Australian dream.”