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Sophie Wolstenholme, Isabella Freeman and Georgie Arnott outside their Denistone St property in Newtown which they recently rented. Picture: Mitch Cameron Source: News Corp Australia
WITH the median Sydney house price tipped to hit the $1 million mark by Christmas, more young locals are facing a future as renting “lifers†as they give up on the dream of owning their own home.
And it seems the phenomenon is only going to get worse as the gap between what we earn and how much it costs to buy a house continues to widen.
“We are seeing an increase in lifelong renters. They have been priced out of the market and are striving to keep pace,†Social demographer Mark McCrindle of McCrindle research said.
“Twenty years ago the cost of buying a house in Sydney was six times the average salary.
Today it is 14 times. Property prices in Sydney are accelerating at a rate far greater than wage growth and that’s a problem.â€
And more and more renters are being forced into to share accommodation as the costs of renting in Sydney also skyrocket.
In the latest Consumer Insights Report on Tenants and Sharers commissioned by property portal realestate.com.au, 29 per cent of NSW respondents said they chose share accommodation because they could not afford to rent independently.
“While many people are happy renting as it suits their lifestyle, we know that there are people that are renting out of need, not out of choice,†a realestate.com.au spokesperson said.
Gross-salary
10,000 to 40,000
40,000 to 70,000
70,000 to 100,000
100,000 to 130,000
130,000 to 160,000
160,000 to 190,000
190,000 to 220,000
220,000 to 250,000
250,000 to 280,000
280,000 to 310,000
310,000 to 340,000
340,000 to 370,000
370,000 to 400,000
400,000 to 1,700,000
Isabelle Freeman, Georgia Arnotts and Sophie Wolstenholme moved into their $875-a-week Newtown share house a month ago.
The trio, all 23, have finished university and are starting out in the workforce but say the “Great Australian Dream†feels very far away.
“I actually had a conversation with my family recently about whether I’d ever be able to buy a home and we were saying that with houses now getting close to $1 million it feels like I never will,†Ms Freeman said.
With a hefty HECS debt, and now considerable rent to pay, she said saving to buy a property was “out of the pictureâ€.
Ms Arnotts said she had “settled†with the idea she will be renting for the foreseeable future.
“I don’t even see myself being able to save anything close to buying anytime soon,†she said.
Georgie Arnott, Isabella Freeman and Sophie Wolstenholme are part of a generation who can only afford to rent. Picture; Mitch Cameron Source: News Corp Australia
Although Ms Arnotts said her job doesn’t come with a big salary at the moment, she refused to chase a high-paying job just for money.
“I’m not going to go and slave away at a job I hate just so I can save enough money to buy. You have to enjoy what you’re doing,†she said.
But Ms Wolstenholme said she remained hopeful that homeownership is attainable.
“I’ve just always assumed that I’m going to buy my own home one day, but it definitely won’t be soon,†she said.
Originally published as The kids who will rent all their lives