Home ownership is not on 34-year-old town planner Eric Smith’s to-do list as soaring property prices push the prospect of buying a house out of many young Australians’ reach.
Key points:
- Property prices in Launceston are among the fastest growing in regional Australia
- Many young renters are finding alternative investments outside home ownership
- There are signs the red-hot regional property market is starting to cool
“Instead of chasing that dream and tying myself to saving $80,000 over the next 10 years so I could put a deposit on a house, I thought I would just commit to renting forever,” he said.
His Tasmanian home city of Launceston has some of the highest property prices in regional Australia.
The latest CoreLogic Regional Market Update revealed unit prices grew 30.9 per cent in the 12 months to April, faster than any of the 25 largest non-capital regions in the country.
Units were also selling faster than anywhere else, with a median time of 11 days on the market while house prices were up 29.5 per cent.
Mr Smith said he would prefer to invest his savings into stocks rather than becoming another disciple of Australia’s property obsession.
“It is disappointing that property does have such a preferred tax status,” he said.
“One of the ways to solve the housing crisis is to not treat housing as an investment but as a human right.”
A ‘lose-lose’ situation
Launceston resident Stuart Mansfield said being a lifelong renter was a battle.
He said saving for a deposit was tough as he survived on a small carer’s pension while looking after his 12-year-old son.
And while he accepted he might never buy, he said renting wasn’t an easier option.
“It’s just a lose-lose situation for me to even attempt to get a private rental.”
Mr Mansfield said he was facing the prospect of living in his car after the owner of his property doubled the rent as a housing affordability scheme ended.
He said he was exploring public housing but the waiting list was 72 weeks long.
Hot market starting to cool
There are signs things may cool as many feel the heat of the property boom.
CoreLogic’s report showed property price growth in non-capital cities slowed from a peak of 6.6 per cent in the three months to April in 2021 to 4.7 per cent in 2022.
CoreLogic head of research Australia Eliza Owen said interest rate rises were driving the cool-down and price declines would flow to regional Tasmania “in due course”.
But Ms Owen said buying wouldn’t necessarily be cheaper than renting if property prices fell.
Mr Smith said more should be done in policy and planning to accommodate lifelong renters.
“A lot of the new subdivisions that are occurring just replicate low-density, single dwellings with enormous yards,” he said.
“But I don’t want a garden.”
He said he and his partner would like two bedrooms and maybe a courtyard.
“But it’s impossible to get that outside the centre of the city and there’s no reason,” he said.
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