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Melbourne, Australia - Millions of Aussies may be experiencing mortgage stress, but ‘mortgage apathy’ is the latest trend on the block, according to new research from leading national insurer AAMI.
Young renters in capital city areas are increasingly dropping out of the race to get a foot on the property ladder, with 8% fewer saying they feel the pressure to buy a house than there were in 2010. Over one third of young city renters that say they’re happy renting with no plans to buy a property. A double‐whammy of high housing prices and global uncertainty around property prices could be to blame for the rise of ‘mortgage apathy’, with younger city renters preferring to hold tight, rather than make what is likely to be the biggest financial decision of their life.
Newspoll Market & Social Research conducted an independent internet survey of 3,121 Australians, 18 years of age and older, across all states and territories in 2012 including 184 renters aged 18‐24 years in ACT, Sydney, Melbourne, Brisbane, Perth and Adelaide. Collected data has been weighted in line with current Australian Bureau of Statistics or ABS population demographics to ensure any extrapolation of results is representative of age sex and area.
Newspoll Market & Social Research also conducted an independent internet survey of 2,812 Australians, 18 years of age and older, across all states and territories in 2010 including 284 renters aged 18‐24 years in ACT, Sydney, Melbourne, Brisbane, Perth and Adelaide. Collected data has been weighted in line with current ABS population demographics to ensure any extrapolation of results is representative of age sex and area.
The key findings
31% of city renters aged 18 to 24 report feeling pressure to get a mortgage, compared to 39% in 2010.
35% of city renters aged 18 to 24 say they are happy renting with no plans to get a mortgage, compared to 29% in 2010.
While Australians are typically achieving life’s milestones like getting married, having children and buying a house later in life, this is not enough to account for such a dramatic rise in “Mortgage Apathy”, according to Reuben Aitchison, Corporate Affairs Manager for AAMI.
“Twenty or thirty years ago average house prices in Australia were three to four times the average salary, whereas today we are looking at a multiple of seven times. Saving for a deposit is increasingly out of reach for young people today, and if they are going to get a foot on the property ladder they want to wait till they know they are investing at just the right time.
“We know that people who own their own home tend to take a greater sense of responsibility for their dwelling. But this is a new trend and we will watch with interest to see how longer‐term renting affects the way tenants treat their dwellings and therefore the effect on risks faced in and around the home.”