The Australian Bureau of Statistics (ABS) has released analysis from the census showing how housing has gotten increasingly expensive and smaller over the generations, measured from Baby Boomers in 1991 to Generation X in 2006 and Millennials in 2021.
The likelihood of owning a home when aged 25-39 years fell for each successive generation. Over half (54.6%) of Millennials in 2021 were homeowners (owned outright or with a mortgage), compared with 62.1% of Generation X in 2006 and almost two-thirds (65.8%) of Baby Boomers in 1991.
Millennials were also the least likely to own their home outright. Baby Boomers at aged 25-39 years were three times more likely than Millennials to own their home without a mortgage.
Millennials spent more of their incomes on rent (17.4%) than Baby Boomers (16.6%) but spent less than Generation X (18.1%).
Interestingly, Millennials also spent more of their incomes (20.7%) on mortgage repayments than Baby Boomers (20.3%), despite the official cash rate (OCR) being just 0.1% in 2021 versus 9.5% in 1991. On this measure, Generation X fares worst with 28.5% of incomes spent on mortgages in 2006 when the OCR was 6.0%:
Obviously, the situation will have changed markedly since, given the OCR and variable mortgage rates have soared by 2.5% since May:
This rapid increase in mortgage rates will likely have lifted Millennials’ repayments close to or above Generation X’s level.
Finally, only 66.3% of Millennials lived in a detached house in 2021. This compares to 80.8% of Baby Boomers in 1991 and 75.2% of Generation X in 2006:
In short, Millennials are paying more for housing than other generations, while also enjoying less quality by living further out or being forced to live in flats.
