Census 2016: Are house prices to blame for keeping young adults at home?
Twenty per cent more 25 - 34 year olds were shacked up at home on the night of the 2016 Census compared to five years ago, indicating that hipsters are fast becoming a generation that stay in the nest.
For those wondering why there’s been such a steep rise in the number of non-dependants living with their parents, Mozo’s Property Expert Steve Jovcevski suspects that the housing boom has a lot to do with it.
“Whether you want call them “kidults”, “millennials” or “hipsters”, I’d place my bets on young people in their 20s and 30s choosing to live in the family home for financial reasons,” he said.
“House prices are simply not what they used to be in Sydney and Melbourne, making it harder for young people to grow their careers in those cities as renters, while at the same time saving for a first home.”
According to Mozo Data, the average home loan interest rate for owner occupiers back in 2011 was 7.26%, while fast forward to 2016 and the average rate was 4.51%.
However, Jovcevski said that even though interest rates used to be higher, property prices were considerably cheaper back then compared to now, so saving up for a deposit was more achievable.
The median price for a house in Sydney in February 2011 was $637,258*, compared with $780,000** in August, 2016 (the same month as when the Census took place).
If you were looking to put down a 10% deposit on a first home loan back in 2011, you’d only need to save $63,725. Five years later borrowers would have to cough up $78,000, that’s $14,247 more.
On the plus side, new and improved first home owner grants and concessions including the abolition of stamp duty for eligible applicants and the first home super saver scheme are set to kick in on July 1, which could help to turn the stay in the nest trend around.
“While these incentives may improve housing affordability in the short term, I urge Aussies with deposits saved up to act sooner rather than later before a flood of buyers enter the market and push prices up even further” Jovcevski warned.
The 2016 Census data also revealed that home ownership rates are dropping. 25 years ago, 41% of households owned their homes outright, while in 2016 only 31% of households did.
“Many borrowers continue to pay a premium on their mortgage by banking with the Big 4” noted Jovceski. “Every percentage point difference you can get by going with a smaller lender is going to help you pay off your mortgage sooner.”
If you’re in the market for a first home loan, use Mozo’s comparison hub to shop around for the best rates and features across hundreds of mortgages in the market.
*According to Domain
Home loan comparisons on Mozo
Promoted
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Fixed Home Loan
- Owner Occupier
- Principal and Interest
- Interest rate
-
5.54
%
p.a.
Fixed 2 years
- Comparison rate
-
5.93
%
p.a.
- Initial monthly repayment
-
$4,106
Competitive fixed rate on up to a 30 year loan term. No application fees to pay. Additional repayments up to $20,000 per year without penalty. Free online redraw. Optional 100% offset feature ($10/month) 10% minimum deposit. Fees & charges apply, Australian Credit Licence 237879 is held by Bendigo and Adelaide Bank Limited, the credit provider.
- Interest rate
-
5.54
%
p.a.
Fixed 2 years
- Comparison rate
-
5.93
%
p.a.
- Upfront fees
-
$495
- Ongoing fees
-
$0.00
- Discharge fee
-
$325.00
- Extra repayments
-
- Redraw facility
-
yes - free
- Offset account
-
yes- optional with $10/month
- Maximum loan to value ratio
- 90.00%
- Minimum borrowing amount
- $50,000
- Maximum borrowing amount
- $3,000,000
- Type of mortgage
- Fixed
- Repayment types
- Principal & Interest
- Availability
- Owner Occupier
- Repayment options
- -
- Special offers
- -
Read our Mozo Review to learn more about this NRMA Insurance Fixed Home Loan
Go to site
-
Fixed Home Loan
- Owner Occupier
- Principal and Interest
- Interest rate
-
5.54
%
p.a.
Fixed 2 years
- Comparison rate
-
5.93
%
p.a.
- Initial monthly repayment
-
$4,106
Competitive fixed rate on up to a 30 year loan term. No application fees to pay. Additional repayments up to $20,000 per year without penalty. Free online redraw. Optional 100% offset feature ($10/month) 10% minimum deposit. Fees & charges apply, Australian Credit Licence 237879 is held by Bendigo and Adelaide Bank Limited, the credit provider.
- Interest rate
-
5.54
%
p.a.
Fixed 2 years
- Comparison rate
-
5.93
%
p.a.
- Upfront fees
-
$495
- Ongoing fees
-
$0.00
- Discharge fee
-
$325.00
- Extra repayments
-
- Redraw facility
-
yes - free
- Offset account
-
yes- optional with $10/month
- Maximum loan to value ratio
- 90.00%
- Minimum borrowing amount
- $50,000
- Maximum borrowing amount
- $3,000,000
- Type of mortgage
- Fixed
- Repayment types
- Principal & Interest
- Availability
- Owner Occupier
- Repayment options
- -
- Special offers
- -
Read our Mozo Review to learn more about this NRMA Insurance Fixed Home Loan
Go to site -
Variable Home Loan
- Owner Occupier
- Principal and Interest
- Interest rate
-
5.98
%
p.a.
Variable
- Comparison rate
-
6.02
%
p.a.
- Initial monthly repayment
-
$4,308
Competitive variable rate on up to a 30 year loan term. No application fees to pay. Unlimited additional repayments. Free online redraw. Optional 100% offset feature ($10/month) 10% minimum deposit. Fees & charges apply, Australian Credit Licence 237879 is held by Bendigo and Adelaide Bank Limited, the credit provider.
- Interest rate
-
5.98
%
p.a.
Variable
- Comparison rate
-
6.02
%
p.a.
- Upfront fees
-
$495
- Ongoing fees
-
$0.00
- Discharge fee
-
$325.00
- Extra repayments
-
- Redraw facility
-
yes - free
- Offset account
-
yes- optional with $10/month
- Maximum loan to value ratio
- 90.00%
- Minimum borrowing amount
- $50,000
- Maximum borrowing amount
- $3,000,000
- Type of mortgage
- Variable
- Repayment types
- Principal & Interest
- Availability
- Owner Occupier
- Repayment options
- -
- Special offers
- -
Read our Mozo Review to learn more about this NRMA Insurance Variable Home Loan
Go to site -
Simple Home Loan Variable
- Owner-Occupied
- Principal and Interest
- LVR>70%
- Interest rate
-
6.19
%
p.a.
Variable
- Comparison rate
-
6.19
%
p.a.
- Initial monthly repayment
-
$4,405
Enjoy a low variable rate with no application, ongoing or monthly fees to pay. Access your money via internet banking at any time with free redraws. Make additional repayments at any time. Available for owner occupied, investment and interest only repayments.
- Interest rate
-
6.19
%
p.a.
Variable
- Comparison rate
-
6.19
%
p.a.
- Upfront fees
-
$0
- Ongoing fees
-
$0.00
- Discharge fee
-
$175.00
- Extra repayments
-
yes - free
- Redraw facility
-
yes - free
- Offset account
-
no
- Maximum loan to value ratio
- 90.00%
- Minimum borrowing amount
- $150,000
- Maximum borrowing amount
- $3,500,000
- Type of mortgage
- Variable
- Repayment types
- Principal & Interest
- Availability
- Owner Occupier
- Repayment options
- Weekly, Fortnightly, Monthly
- Special offers
- -
Read our Mozo Review to learn more about this First Option Bank Simple Home Loan Variable
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Discounted Home Value Loan
- Owner Occupier
- Principal & Interest
- LVR 80-90%
- Interest rate
-
6.39
%
p.a.
Variable
- Comparison rate
-
6.39
%
p.a.
- Initial monthly repayment
-
$4,499
Enjoy competitive rates for owner occupiers. Enjoy unlimited free extra repayments. Flexibility to redraw additional payments for free. No ongoing monthly service fee. Settlement fee waived on new borrowings from $50,000 (T&Cs apply).
- Interest rate
-
6.39
%
p.a.
Variable
- Comparison rate
-
6.39
%
p.a.
- Upfront fees
-
$0
- Ongoing fees
-
$0.00
- Discharge fee
-
$300.00
- Extra repayments
-
yes - free
- Redraw facility
-
yes - free
- Offset account
-
no
- Maximum loan to value ratio
- 90.00%
- Minimum borrowing amount
- $50,000
- Maximum borrowing amount
- $15,000,000
- Type of mortgage
- Variable
- Repayment types
- Principal & Interest
- Availability
- Owner Occupier
- Repayment options
- Weekly, Fortnightly, Monthly
- Special offers
- -
Read our Mozo Review to learn more about this HSBC Discounted Home Value Loan
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* WARNING: This comparison rate applies only to the example or examples given. Different amounts and terms will result in different comparison rates. Costs such as redraw fees or early repayment fees, and cost savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan. The comparison rate displayed is for a secured loan with monthly principal and interest repayments for $150,000 over 25 years.
** Initial monthly repayment figures are estimates only, based on the advertised rate. You can change the loan amount and term in the input boxes at the top of this table. Rates, fees and charges and therefore the total cost of the loan may vary depending on your loan amount, loan term, and credit history. Actual repayments will depend on your individual circumstances and interest rate changes.
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