Why ‘Everyone’s Against Boomers’—At Least When It Comes to Buying a Home

He said one source of support was the savings cushion that workers had built up when they were unable to spend normally during the lockdown.

Homebuyers have also been relying on their parents’ banks, he said. Parents who have gained wealth through the property market can act as guarantors or provide loans or cash gifts for their children to buy homes.

Other buyers are working longer hours or multiple jobs in a strong labor market, he said.

“While these issues have been raised for years, there are still questions about how long this situation can continue … but the housing market continues to move forward.”

On wages, he said the Reserve Bank’s inflation target of 2 to 3 per cent meant it would be difficult for wages growth to exceed 4 per cent a year, as any wage growth above that level would likely add to inflationary pressures.

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Mortgage broker Aaron Christie-David is catering to homebuyers seeking help from their parents or through the government’s first-home buyers scheme.

“There are people who have already entered the market, so they’ve beaten you to it — the baby boomers, who bought all those properties years ago, but now everyone is against the baby boomers because time is on their side,” said the managing director of Atelier Wealth.

“As an asset class, real estate has proven itself and Australians are in love with it.

“The power of compound interest, that’s the key. Real estate can compound, but income can’t.”

ANZ economist Madeline Dunk said continued house price increases were making it difficult for people to enter the property market.

She pointed to a mismatch between housing supply and demand. Housing construction has been muted since the pandemic began, while investor demand has remained strong, with many owner-occupiers looking to have a home office.

“There have been some structural changes in the way households are housing. They value their homes and want to make them a comfortable place to work from home,” she said.

“We really want to own our own home, that’s part of the Australian psyche.”

Some buyers had to seek support from family members, while others cut back on spending, she said.

“For many people, buying a home is a difficult proposition and we know the time it takes to save for a deposit has increased significantly.”

But she said wages growth in Australia was slower than elsewhere and it would take time for low unemployment to translate into higher wages.

He said investors were also actively investing in low-priced properties, chasing rental yields.

But he said for young Australians who couldn’t save enough to buy a home, their parents’ bank was the ultimate support.

“The only way they could qualify is one is through a parent or family member, or two they can get access to some kind of first-home buyer program,” he said.