Stagnant Wages Hamper Homeownership for Young Australians

The information on this website is general in nature and does not take into account your objectives, financial situation, or needs. Consider seeking personal advice from a licensed adviser before acting on any information.

In its analysis, Per Capita underscores how those in their late 20s and early 30s have seen a significant decrease in homeownership. Historical data from the Australian Bureau of Statistics reveals a steep fall from 64% in 1971 to just 50% in 2021 for individuals aged 30 to 34 owning a home. Similarly, homeownership for 25 to 29-year-olds plummeted from 50% to 36% in the same span.

The core issue, as outlined by Per Capita, is the widening gap between wages and rapidly escalating home prices. In the early 1970s, it was common for wages to keep pace with house prices, allowing for homeownership within five years of dedicated saving. However, over the last decade, this balance has shifted dramatically, with wages lagging behind the sharp increase in property costs.

From 2012 to 2022, young Australians reportedly faced what Per Capita terms a "lost decade" of wage stagnation. The implications are clear: individuals were not only missing out on the ability to save for a home deposit but also saw their borrowing capacity diminish.

The switch in wage and home price dynamics is stark. While nominal wages doubled between 2003 and 2024, house prices surged by nearly threefold. According to Per Capita's estimates, workers lost on average $4,990 per year, amounting to a cumulative financial hit of $54,000 over the decade. These financial constraints have stymied the ability to save for home deposits drastically.

Per Capita points to historical policy decisions, specifically the Coalition’s Work Choices legislation, as a factor suppressing wage growth. However, they suggest a positive shift, as the current wage growth trajectory suggests improvements, albeit with recovery from the stagnation labeled as a long-term challenge.

Amid these criticisms, Per Capita overlooks other factors impacting young Australians' housing affordability, such as high immigration levels. They argue that increased immigration pressures the housing market, drives up rents, requires larger deposits, and intensifies labor market competition, which could suppress wage growth further.

Moving forward, addressing this multifaceted issue will require actions that consider wage growth, housing policy, and immigration to enhance prospects for young Australians. As the economy continues to evolve, the need for strategic policy interventions to secure sustainable and equitable economic participation remains critical.

Published:Wednesday, 2nd Apr 2025
Author: Paige Estritori

Please Note: We do not endorse any specific products or companies. Some content is sourced from third parties, including press releases, and may not be independently verified for accuracy or completeness.

Share this news item:

Finance News

Clear

Mortgage Arrears Put Household Budgets Back in Focus

16 Sep 2026: Paige Estritori

Australia’s mortgage market is still showing resilience, but the latest banking indicators point to a household sector that has less room for error than it did during the ultra-low-rate years. APRA’s recent lending and asset quality data suggests that arrears remain an important signal to watch, particularly as higher repayment commitments continue to work through household budgets. - read more

Rising Loan Sizes Put Fresh Focus on Borrower Budgets

09 Sep 2026: Paige Estritori

Australian home buyers are facing a familiar but important shift: even when interest rates appear steadier, larger property prices can still push borrowing plans back under pressure. Recent housing finance and property market reporting points to buyers taking on bigger loan commitments as values strengthen across parts of the country, particularly in markets where supply remains tight and competition for quality homes is still firm. - read more

Low-Deposit Pathways Put First Buyers Back in Play

02 Sep 2026: Paige Estritori

First-home buyers are getting a fresh reason to revisit their purchase plans, with recent housing finance commentary pointing to stronger interest in low-deposit purchases under the expanded federal Home Guarantee Scheme. The broader settings are designed to help eligible buyers enter the market with a smaller deposit and without paying lenders mortgage insurance, which can otherwise add a substantial cost to buying with less than a standard deposit. - read more

Property Momentum Puts Borrowing Plans Back Under Pressure

26 Aug 2026: Paige Estritori

Australia's housing market is showing renewed signs of momentum, and that matters for anyone preparing to buy or upgrade. Recent property market reporting suggests values are firming across several capitals after a patchier period, with buyer demand, limited listings and expectations around future interest rates all playing a role. For households who were hoping that earlier winter softness would create more room to negotiate, the latest shift is a reminder that affordability can change quickly. - read more

Another Rate Hold Gives Borrowers Time to Reassess

19 Aug 2026: Paige Estritori

Australia’s mortgage market has moved into another watch-and-wait phase after the Reserve Bank of Australia kept the cash rate unchanged at its latest meeting. For borrowers, the decision offers a welcome period of stability, but it should not be mistaken for a signal that home loan costs are now locked in place. - read more

Click for more Finance News