While early adulthood is traditionally the period when young adults begin to live independently, new AHURI research reveals many young Australians are putting their longer term housing aspirations on hold to meet other life goals such as completing education or gaining secure employment.
In 2015-16, only 17 per cent of young adults aged 18-24 years lived independently, with most (66 per cent) still living with their parents. In the next age bracket, around a third of Australians aged 25-34 either remained or moved back with parents or lived in shared housing.
The research, Young Australians and the housing aspirations gap, undertaken for AHURI by researchers from Swinburne University and Curtin University, examined the short and longer term housing aspirations and the housing aspirations gap (where current housing is not meeting people’s requirements) among ’emerging adults’ (aged 18-24 years) and ‘early adults’ (aged 25-34 years).
The report’s lead author Dr Sharon Parkinson of Swinburne University said as house prices and rents have risen ahead of incomes, it is taking longer for young adults to create their own independent and secure households, and for some it is not attainable in the foreseeable future.
“This has led many to staying or returning to the family home, or taking up informal living arrangements such as living in group households,” Dr Parkinson said.
The ideal of home ownership is not as persistent as for past generations, varying with age, education and quality of current living arrangements. Sixty per cent of Australians aged 18-24 years and 70 per cent of those aged 25-34 years identified owning and living in their own home as their ideal tenure. This compares to 80 per cent of older Australians.
For emerging adults (18-24 years) sharing a house with a group typically met their short-term (82 per cent) but not longer-term (25 per cent) aspirations. While living with parents mostly met short-term (76 per cent) but not longer-term (30 per cent) aspirations.
For early adults (25-34 years) the housing aspirations gap is greatest for individuals in the private rental sector. For interviewees renting privately, the requirement to move house was the one constant in their lives. Short-term aspirations for this group were shaped around ‘horizontal’ moves or finding an arrangement slightly better than the previous move, but with no sense of moving upwards or being closer to achieving their longer-term housing hopes.
Despite rising housing costs, most 18-24-year-olds thought home ownership would be possible in the near future.
“We found that many emerging adults had a ‘blind optimism’ that they would be able to achieve their housing aspirations despite not actively planning for their housing future,” Dr Parkinson said.
“Nearly a third of those we surveyed felt that they would be purchasing a home within the next five years, with a further 36 per cent believing they would buy in five to 10 years.”
By early adulthood there is a sharp divide in optimism influenced by education and income levels. Nearly two-thirds (61 per cent) with a tertiary education and a higher income believe they would buy a property within five years, compared to just over a third (36 per cent) for those with an education to Year 12 or below, and less than a quarter (23 per cent) for those with an education to Year 11 or below.