Recent studies highlight the severe barriers to homeownership in Australia and the UK, with high income and deposit requirements pushing the dream out of reach for many.
In Australia and the UK, aspiring homeowners are facing considerable hurdles to afford their first homes, with recent studies highlighting the daunting realities in both regions.
In Australia, particularly in the eastern capitals, a new analysis by the Greens has unearthed the striking income and deposit requirements for buying a house. Sydney, for instance, demands a $272,000 deposit and an annual income of $293,578 for a purchase to be considered affordable, which means mortgage repayments should not exceed 30% of the buyer’s income. This scenario leaves only Perth and Darwin as somewhat more attainable markets. The Greens’ housing spokesperson, Max Chandler-Mather, criticized the current system for making homeownership an unattainable dream for many, attributing part of the problem to investor incentives like negative gearing and capital gains tax discounts. The Greens propose phasing out these incentives to make housing more accessible.
In London, a report by Reallymoving indicates that first-time buyers on an average salary require almost nine years to save for a deposit and moving expenses, significantly longer than in other parts of England. CEO Rob Houghton pointed out the disparity and the impact of high housing costs on young Londoners’ ability to save for a home. The study suggests that whilst a Lifetime ISA could shorten the saving period by offering a government top-up, caps on eligible property prices restrict its effectiveness in the capital.
Both countries are grappling with the challenge of making housing more affordable, with policy proposals and financial instruments forming part of the conversation on how to support first-time buyers in these increasingly inaccessible markets.
