Across large parts of the world,Generation Y is struggling toget a foot on the property ladderwithout help from parents orgrandparents. Sophie Chick,Head of Residential Research,Savills Sydney, and DuongDucHien, Director of Residential Sales, Savills Hanoi examines the issue from the perspectives of two different markets.
Housing affordability has become a worldwide issue since the global financial crisis (GFC), partly because mortgage lending has been significantly curtailed by regulation. It is the younger generations, usually needing the highest loan-to-value ratios and loan-to-income ratios, who are most affected.
In developed markets, this has become evident. In Australia, the share of homeowners aged 25 to 34 is 45% (it was 58% in 1986). In the US, the current rate is 31% for under 35s, against 39% in 1995, while, in the UK, only 5% of housing equity is owned by the under 35s, who are now paying four and a half times as much in rent to landlords as they are in mortgage interest.
Sophie Chick, Head of Residential Research, Savills Sydney believed this generational effect goes beyond the GFC and “is symptomatic of how equity has become concentrated in older generations through a history of home ownership, mortgages and price rise.”
“Meanwhile, younger ‘equity have-nots’ find it increasingly difficult to access owner occupation, requiring large amounts of equity to fund rising prices and higher deposits. Generation Y (aka Generation Rent) is having to delay life choices such as marriage and parenthood, and one of the essential requirements to become a home purchaser is now a dual income, despite the low interest rate period seen post-GFC,” said Chick.
For more information, click 06042017 – The wealth of ages – EN or 06042018 – Thị trường bất động sản và thế hệ trẻ – VN
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