New research suggests millennials are being locked out of the housing market by older generations. 

The study by University of South Australia researchers has found that contradictory government policies are creating intergenerational inequity, meaning the housing market cannot cater for both older and younger generations at the same time. 

The research paper explores generational differences in property tenure in Australia, and identifies an inequitable distribution of housing among older and younger people.

Older generations - Silent Generation and Baby Boomers - hold the lion’s share of housing properties which, by default, locks out their younger Millennial (or Gen Y) counterparts.

Over three census periods (2006, 2011 and 2016) researchers found that 80 per cent of older generations were long-standing homeowners compared to only about 50 per cent of Millennials.

The situation is exacerbated by Australia’s soaring house prices, where recent reports indicate that Australian home buyers paid an average of $1,066,133 to secure a home over the past year (a national increase of 25 per cent).

Lead researcher, Dr Braam Lowies, says that aside from the massive financial constraints, the research highlights how government policies designed to protect one generation, can hinder another.

“In Australia, owning your own home has always been the great Aussie dream. But each year, this dream is becoming further out of reach for younger Australians,” Dr Lowies said.

“Australia has an ageing population, the majority of whom report a desire to ‘age in place’ - to live in the community with some independence, rather than in residential care. And with growing support from the government – such as home support programs and home care packages – older people can do this with greater confidence and security.

“Yet on the other end of the age spectrum, Millennials are finding themselves locked-out of the market as the Silent Generation and Baby Boomers retain a significant portion of the housing stock, much of which has considerable value and development potential due to its lot size and location.

“For Millennials, this limits their housing options, creating severe housing tenure inequalities. The consequence is that younger people are frequently compelled to revert to the parental home or the rental market - and this is despite government grants to support first home buyers.”

Sixty-eight per cent of Boomers owned their own home by age 30-34, compared with 50 per cent of Millennials at the same age.

Researcher and property expert Peter Rossini says more nuanced housing policies are needed to address intergenerational differences.

“With more than 15 per cent of the population (3.7 million) aged over 65, and estimations that this will grow to 22 per cent (8.7 million) by 2056, the conundrum of one generation impeding another is not going away any time soon,” he said.

“Having bipolar housing scenarios across generations is a demonstration of how the current system is unbalanced. It’s an unsustainable position and one that requires a review of current housing policy to deliver more refined and considered outcomes for all.”

The study is accessible here.