Australia’s eight-year house price boom has savaged the living standards of poorer Australians while so far leaving the wealthy untouched, a new Grattan Institute analysis finds.
But the report, to be released on Monday, warns of a “catastrophic” impact on all income groups should mortgage rates rise by more than a few percentage points.
The institute’s chief executive, John Daley, said Australians who already owned their houses had been little affected by soaring prices to date because they had been “hedged”. If they moved, they could buy again for about the price they got when they sold. Property investors had done well out of the explosion in Sydney and Melbourne prices because they had always been planning to sell.
But new buyers had been locked out.
Home ownership had plummeted among Australians aged 25 to 34, sliding from 61 per cent in the early 1980s to just 44 per cent in the most recent census. Ownership among Australians aged 35 to 44 had plunged from 75 to 62 per cent.
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