Gen Y housing affordability concerns can be ignored for only so long
Late last week the Turnbull Government-dominated Parliamentary Economics Committee released its report on housing affordability. Rather than reforming negative gearing or other demand side drivers, the Report suggests the housing affordability problem was primarily due to supply constraints, and therefore a problem for the states to resolve. As a result, and seemingly signaling the Government has given up on the issue, the Committee made not a single recommendation.
However, research commissioned by Map May Plan, The Financial Fitness of Working Australians 2016 Report suggests Governments at all levels risk amplifying the genuine concerns of Generation Y by failing to take decisive action to address housing affordability.
Mr Ripoll Chair of Map My Plan and former Chair of the Joint Parliamentary Committee on Corporations and Financial Services, said almost two thirds (64%) of Millennials are worried about being able to afford their own home. Their angst doesn’t end there. The report also reveals that Gen Y are more worried than Baby Boomers and Gen X, about a raft of financial matters.
“Gen Y is more worried than other generations about being able to afford childcare or other costs of raising children, about being able to pay bills and weekly expenses, not having emergency savings, losing their job, not meeting healthcare costs, managing credit card debt, affording tertiary education and being able to afford the lifestyle they want,” said Mr Ripoll.
“Our research did some significant myth-busting. Counter to their reputation for frivolous spending on smashed avocado, Gen Y is actually taking control of their financial future,” said Mr Ripoll.
The Financial Fitness Report, surveyed 1,573 workers – a statistically representative sample of the Australian working adult population. Part of the survey measures respondents’ Financial Fitness Index, which combines their level of financial control, capacity to absorb financial shock, their planning and financial freedom.
Mr Ripoll said the Financial Fitness Index revealed that Gen Y (at 113.9) are more financially fit than Gen X (at 110.2) and are doing better financially than all other generations on a range of metrics.
“Generation Y is taking proactive steps towards financial security. At 42 per cent, they’re the generation most likely to be saving more than 10 per cent of their income each month. They are also more likely to have income protection insurance (28 per cent) than other generations.
“70 per cent have either a comprehensive or rough financial plan compared to 62 per cent of Boomers and only 57 per cent Gen X.
“Our report has revealed Gen Y is emerging as the next ‘sandwich generation’; worried about taking care of both their children and their parents. They are more concerned than other generations about supporting their parents’ needs as they get older (52%) and about being able to take time off work to care for a baby or other family members (54%).
Bernie Ripoll said elections were generally won or lost on people’s fears and anxieties.“I’m with Economist Saul Eslake on this issue. He said ‘in order to improve housing affordability, governments plural - that is: federal, state and local - needed together to step back from policies which inflated demand and embrace policies which boost supply’. Any government that’s passing the buck and not proactively addressing the genuine worries around housing affordability is risking a voter backlash, especially from Generation Y,” said Mr Ripoll.