Australian millennials have world's second-lowest home ownership

Australian millennials have the second-lowest rate of home ownership in the world, according to a study that also reveals house prices are growing much faster than wages.

The study by HSBC bank says only 28% of Australians aged 18 to 36 own the home they live in – a situation only narrowly better than the United Arab Emirates.

The survey of 9,000 people across nine countries found an average millennial home ownership rate of 40%, with China leading the way on 70%. Malaysia and the USA ranked equal fourth on 35%, the UK was seventh on 31% and the UAE ranked last with 26%.

More than four-fifths (83%) of Australian millennials surveyed said they intended to buy a home within five years, but the report’s authors suggested this was optimistic. Australian capital city house prices have grown by more than 10% in the past 12 months, while real salaries were only projected to increase by 1.6%.

“In those countries where there is a perfect storm of stagnating salaries and rising house prices, the dream, while not dead, looks set to be deferred,” said HSBC’s Louisa Cheang.

Worldwide, 64% of millennials said they needed a higher salary before they could buy a home, and 69% said they did not yet have enough for a deposit. A survey in February found Australian millennials were overwhelmingly pessimistic about their futures, with only 8% believing they would be financially better off than their parents.

As of October last year, even if a young person put aside $100 a week, it would take them 26 years to save up for a 20% deposit on a median-priced Sydney house.

Australian house prices rose 12.9% in the past 12 months, including a 19.65% spike in Sydney and 17.5% in Melbourne. Median Sydney house prices rose 82% in the five years between 2011 and 2016.

A third of Australian millennials already on the property ladder were given a helping hand by their parents, with the figure highest in the UAE (50%), Mexico (41%) and China (40%). In Australia, a quarter moved back in with their parents in order to save for a deposit, compared to a fifth globally.

Also known as Gen Y, millennials were defined by the study as those born between 1981 and 1998.

Around the world, Mexican and Malaysian millennials were most ambitious, with 94% planning to own a home in the next five years. In France, only 69% intend to buy by 2023.