The great housing affordability crises continues un abated, with one in three Gen Y respondents expecting to be 'permanently locked out of the housing market'! No wonder there has been a massive fall in loan applications. Who wants to sign up for an LVR of 95% in a rising interest rate environment.
The alternative for Gen Y is to buy into the urban sprawl away from public transport and amenity.
My parents generation (Baby Boomers) were born into a life where employment and home ownership were a given. Globalisation has taken care of the former and now the generous landlord tax concessions/FIRB rule relaxation is taking care of the latter.
So the Boomers have effectively sold their Gen Y progeny into a neo-feudalism where the landed class gentry will assign a whole generation to the role of wage slave. Increasingly the land lords could also be foreign. FUBAR!
At some stage in the future, the Boomer estates will need to be sold off and the pricing will need to take into account the mismatch between those demanding property and what their earning capacity can bear versus the over supply of investment properties being realised. That will be some correction IMO.
This is my tip to become an increasing political issue as Gen Y get angry at the bitter pill they have been forced to swallow and make their political views be heard.
From today's The Age:
' “We have never seen such pessimism amongst prospective first time buyers throughout the past five indexes,” said Vittoria Shortt, chief executive of Bankwest Retail. “Seventy per cent of respondents were very concerned about the level of debt they will be committed to if they buy a property.”
One in three Generation Y respondents, those born between about 1980 and the early 1990s, said they expect to be permanently locked out of housing market.'