David Koch, the former Sunrise host and current economic director for comparison website Compare the Market, has pointed out something older Australiansmay not want to hear.

He has explained that younger Australians bear the brunt of soaring interest rates and inflation while their older counterparts remain largely unaffected.

The Australian housing market has been a hot topic of discussion for years, with prices skyrocketing and making it increasingly difficult for younger generations to enter the property market.

This issue has been exacerbated by the recent rise in interest rates, which according to Koch, has hit young borrowers the hardest.

It has been reported that younger generations have a hard time buying homes. Credit: Freepik

According to data from Compare the Market, homeowners who purchased property at the peak of the market in early 2022 are now finding themselves in a worse financial position each month compared to those who bought it three years earlier.

For instance, a Sydney homebuyer who purchased a property at the average price of $1.12 million in February 2022 and locked in a fixed rate of 2.2 per cent would now face minimum monthly repayments of $2,247 more than their current payment.

In contrast, homeowners who bought at the median price of about $780,000 in April 2019 on the same fixed rate have seen their repayments rise just $1,576 a month.

This means they are better off by $671 every month, or a total of $8,052 a year.

Furthermore, those who bought before the pandemic have benefited from a rise in equity as property prices have significantly increased over the past four years.

Koch has described this situation as a 'tough pill' for young Aussies who have not had time to save up.

'If you bought your home in early 2022 under the pretence that interest rates would stay low for longer, you've now been lumped with the short end of the stick,' Koch said.

'Meanwhile, a lot of mature Australians have missed this pain altogether after selling their properties at the peak and having reaped the benefits over more equity for years.’

'A lot of mature Australians have been shielded from the rate rises, and it's already widely believed that their spending drove inflation.'

A 2023 report from CommBank iQ found that spending among Australians aged over 35 appears to be fuelling Australia's inflation crisis as younger generations are forced to cut back on essentials.

Older generations were said to be going on holidays and dining out more often.

On the other hand, young Aussies were battling higher rents and mortgage repayments, reducing their spending to cope with the worst cost of living crisis in a generation.

Younger Aussies, particularly those aged 25 to 29, reportedly reduced their yearly spending.

Koch describes the current situation as a ‘tough pill’ for young Aussies. Credit: Freepik

Koch said, ‘It's time policy-makers should be asking: how could the pressure be more evenly spread?’

Many older homeowners have stressed that interest rates for home loans back then weren't as tough when looking at history.

In the late 1980s to early 1990s, home loan rates were a high 17 per cent, but today's variable rates are lower at six per cent.

They argued that the sacrifices young adults make now are incomparable to what they and past generations had to do.

However, Koch said new homebuyers are in a tougher spot than before.

For him, house prices had gone way up compared to what people earn, and this was happening faster than wages were growing.

'Back in the 80s, the average cost of an Aussie house was $70,000, now it's $700,000—ten times more expensive,' he said.

He explained that in the 1980s, the average salary was $19,000. In 2023, it was $94,000.

'So in the 80s, the price of a house was four times the average person's income,' he said.

'In 2023, it's eight times the average Aussie salary.'

He has also urged mortgage holders with higher repayments to call their banks and explore whether refinancing to a lower-rate loan is possible.

‘We urge people in mortgage pain to reduce the interest on their repayments as much as possible by shopping around for a better deal,' Koch said.

'When every dollar counts, 2024 should be the year of the new lender.'

The struggles of young Australians in the housing market are real and palpable.

Mira Almasri, a 35-year-old single mother, rents a one-bedroom apartment with her two children, aged nine and 14 in Mosman on Sydney's well-heeled north shore for $600 a week.

She has given up all hope of owning a Sydney home, stating, 'It's impossible to buy in Sydney.'

'Even if you earn loads of money, it's still hard. All my friends who have bought houses in the last two years say they are not happy at all because they are paying high-interest rates.'

Jacob Burrows, 22, an electrician from Perth, Western Australia, hopes to buy a property within the next 12 months despite interest rates being at their highest since 2012.

He has done a lot of research, including reading a book about a man who owned 30 properties by the age of 30.

However, he acknowledged that 'it's fairly hard at the moment because everything is so expensive’.

‘A couple of years ago, I wanted to try and understand the market to appreciate what's involved in buying a house,’ Burrows added.

‘I spent a year or so learning the housing market, and now I'm going to try to look for cheaper houses instead of buying one big one so that I can have a smaller deposit.'

Still, it’s not all rosy for older Australians.

On the other side of the spectrum, a report by Ageing in a Housing Crisis showed that having safe, secure, and affordable housing for older people has become increasingly difficult.

More older people also lived in marginal housing, as analysed by the Australian Bureau of Statistics census data and homelessness estimates.

The increase in housing costs, declining rates of home ownership, carrying mortgage debt into retirement, uncertainty in private rental arrangements, and the worsening shortage of social housing all indicate a widespread problem of housing insecurity.

This issue of insecure or unstable housing impacts people of all age groups. However, for older individuals, the challenges are exacerbated by factors such as limited income-earning potential, growing frailty, illness, caring responsibilities, an increasing need for at-home support, and age-related discrimination.

Key Takeaways

• David Koch delivered a stark message to older generations, pointing out how young Australians face struggles due to high interest rates and inflation.
• Research by Compare the Market indicates that recent homebuyers who purchased at market peak are financially worse off than those who bought homes several years prior.
• Older Australian homeowners have generally been cushioned from recent rate rises, having benefitted from increased property equity.
• Koch suggested that policymakers should consider ways to distribute economic pressures more equitably across generations.

Members, what are your thoughts on this issue? Share them with us in the comments below.

 

[Catherines]

David Koch is inviting trouble between generations. You cannot go backwards and compare times as it was really hard in all eras. People like David Koch cause anger and blame at a generation that's all ready done the hard yards paid the price. Leave seniors alone.

Agree whole heartedly. Leave seniors alone.

 

[BenV]

Going on his comment 17% interest rate to buy a house at $70,000.00 ?? what a joke he really is get it right when I borrowed $50,000.00 to buy my block of land it was at 17.5% interest rate then I had to build a house on it and that was about 37 years ago now it is all payed off and at 70 years of age thank god for that, not to sure where this money bag idiot is coming from this is the man that earns well over a 100,000.00 per year and has done so for many years so not to sure where he gets his figers from but it sure is not the fault of the older gen to what is happening David get it right and donot blame us for it

You’re right Monks.
But David Koch is earning a lot more than $100K a year though and he’s pushing his own barrow (with compare the market)…
We’re with you buddy. We’re in our 70s now and we’re comfortable. But we did it by working hard and reducing our expectations, AND making sacrifices... We’re now debt-free and comfortable - but by gees, we worked bloody hard for it!!!
We bought our first home in the 70s for $29K (2 beds, fibro, single bathroom, no bath, no media room single garage - with a laundry tub in it)… We both worked 2 (or more) jobs as well as me continually renovating with second hand materials. We did it tough and the only regret is that because we’re now aging and wanting to travel - our health deteriorating, we need to get a move on.

 

[Catherines]

Hummmm.
Jacob Burrows (the electrician) is on the right track. Younger people should buy a cheapie to start with (even if it’s in the country - where houses can be cheaper). Then, rent it out and work hard to make extra payments to build up the equity. Then sell & upgrade a little.
I think David Koch is pushing his own barrow a bit - suggesting people use the Compare The Market to get a better interest rate.
Anyway, when we started out, we had a first mortgage at 17% interest on a modest home (with 2 bedrooms, a shower (no bath) & toilet (no ensuite) no media room, no pool, no “open plan living” a single garage with a laundry in it…, As well as this, we had investment loan for a run-down fibro home at 17% interest. We both worked 2 jobs to get ahead, we shared cars to get to work (ortook a bus). No eating out and no holidays. Our first overseas holiday was in our late 50s.
Sorry to say, the younger generation (with the sense of entitlement) need their SUV (not public transport), sometimes a second car too, they want the media room, the ensuite, the double LUG, and all the bells & whistles...
I somewhat take offence at the notion that our (older) generation caused the current “difficulties” the younger generation is enduring.
My observation is that much of the younger generation want everything, they want it now and are unwilling to make sacrifices to get it.

Absolutely. We too had a modest highest home - 3 bedrooms, one bathroom, separate toilet, lounge, dining and kitchen? When we saved enough we built in underneath and gave over the upstairs to our three children so they could have their own rooms and privacy as they grew up.

This is not my first comment about the younger generation and their WANT, WANT, WANT attitudes. So I hope I can spare you all any further comments on this score when ‘know-it-all big wigs’ think they know how we, the older generation, managed. They were not there so don’t know the real pressures we had.

 

[David567]

If people refuse to pay these inflated prices, maybe the prices will drop. At some point we have to say enough is enough. Drive prices down by saying NO.

 

[mylittletibbies]

Whether we like Kochie or not the figures he's quoting are statistically correct.
It was so much easier to get into the housing market when we were young, anyone who really wanted to could.
Those who didn't, in most cases was because of the life choices they made
Nevertheless we are not to blame for today's fiasco, we do not run the country, we don't make the laws, or handle the finances.
Don't blame us, or tell us that we shouldn't spend our hard earned cash if we want to. We went without when we were the young, to be comfortable in our old age
How about taking a swipe at the younger generation with thousand or more dollar mobile phones, fancy cars, overseas holidays, half a dozen credit cards, etc.
They are not happy to settle for a basic 3x1, they want to start off where their parents have ended up or even better.
They also get subsidised child care, maternity leave, first homebuyers grants etc etc, none of which our generation received. They ain't doing so bad

 

[Macarj]

Hummmm.
Jacob Burrows (the electrician) is on the right track. Younger people should buy a cheapie to start with (even if it’s in the country - where houses can be cheaper). Then, rent it out and work hard to make extra payments to build up the equity. Then sell & upgrade a little.
I think David Koch is pushing his own barrow a bit - suggesting people use the Compare The Market to get a better interest rate.
Anyway, when we started out, we had a first mortgage at 17% interest on a modest home (with 2 bedrooms, a shower (no bath) & toilet (no ensuite) no media room, no pool, no “open plan living” a single garage with a laundry in it…, As well as this, we had investment loan for a run-down fibro home at 17% interest. We both worked 2 jobs to get ahead, we shared cars to get to work (ortook a bus). No eating out and no holidays. Our first overseas holiday was in our late 50s.
Sorry to say, the younger generation (with the sense of entitlement) need their SUV (not public transport), sometimes a second car too, they want the media room, the ensuite, the double LUG, and all the bells & whistles...
I somewhat take offence at the notion that our (older) generation caused the current “difficulties” the younger generation is enduring.
My observation is that much of the younger generation want everything, they want it now and are unwilling to make sacrifices to get it.

We started with a 2 bedroom house sheets up at the windows no floor coverings after 5years built an extension 2 bedrooms upstairs a sitting room and a bathroom then 1995 built our dream home 5 bedrooms 42 square home now in retirement from 2011 we have 7 acres and a nice home people nowadays seem to want the big house new car overseas holidays right from the start

 

[Annna]

Always amazes me how the "better off" people generalise that every one is in the same boat. You stay in your ocean liner Kochie and try not to run over any canoes.

Tall Poppy Syndrome.

David Koch is 67. He studied accountancy and has had multiple jobs over several decades including:

1. Accountant;
2. Journalist;
3. Investor;
4. Investment Advisor;
5. Author;
6. Television Presenter;and
7. Public Speaker (not an exhaustive list).

The above jobs and roles are known as work.

Yes, he's wealthy. He's worked for years (19 of which required him to get up and out of the house by 4am).

He's still working.

But he's (now) a Tall Poppy and must be cut down. Onya Australia.

 

[mylittletibbies]

If people refuse to pay these inflated prices, maybe the prices will drop. At some point we have to say enough is enough. Drive prices down by saying NO.

Yes, you are right. The only reason prices are so high is because we have been stupid enough to pay them.
FOMO at work

 

[Annna]

Was he blaming or just stating statistical data?

Just stating the facts .

 

[Lizzie1149]

David Koch, the former Sunrise host and current economic director for comparison website Compare the Market, has pointed out something older Australiansmay not want to hear.

He has explained that younger Australians bear the brunt of soaring interest rates and inflation while their older counterparts remain largely unaffected.

The Australian housing market has been a hot topic of discussion for years, with prices skyrocketing and making it increasingly difficult for younger generations to enter the property market.

This issue has been exacerbated by the recent rise in interest rates, which according to Koch, has hit young borrowers the hardest.

View attachment 38953

It has been reported that younger generations have a hard time buying homes. Credit: Freepik

According to data from Compare the Market, homeowners who purchased property at the peak of the market in early 2022 are now finding themselves in a worse financial position each month compared to those who bought it three years earlier.

For instance, a Sydney homebuyer who purchased a property at the average price of $1.12 million in February 2022 and locked in a fixed rate of 2.2 per cent would now face minimum monthly repayments of $2,247 more than their current payment.

In contrast, homeowners who bought at the median price of about $780,000 in April 2019 on the same fixed rate have seen their repayments rise just $1,576 a month.

This means they are better off by $671 every month, or a total of $8,052 a year.

Furthermore, those who bought before the pandemic have benefited from a rise in equity as property prices have significantly increased over the past four years.

Koch has described this situation as a 'tough pill' for young Aussies who have not had time to save up.

'If you bought your home in early 2022 under the pretence that interest rates would stay low for longer, you've now been lumped with the short end of the stick,' Koch said.

'Meanwhile, a lot of mature Australians have missed this pain altogether after selling their properties at the peak and having reaped the benefits over more equity for years.’

'A lot of mature Australians have been shielded from the rate rises, and it's already widely believed that their spending drove inflation.'

A 2023 report from CommBank iQ found that spending among Australians aged over 35 appears to be fuelling Australia's inflation crisis as younger generations are forced to cut back on essentials.

Older generations were said to be going on holidays and dining out more often.

On the other hand, young Aussies were battling higher rents and mortgage repayments, reducing their spending to cope with the worst cost of living crisis in a generation.

Younger Aussies, particularly those aged 25 to 29, reportedly reduced their yearly spending.

View attachment 38954

Koch describes the current situation as a ‘tough pill’ for young Aussies. Credit: Freepik

Koch said, ‘It's time policy-makers should be asking: how could the pressure be more evenly spread?’

Many older homeowners have stressed that interest rates for home loans back then weren't as tough when looking at history.

In the late 1980s to early 1990s, home loan rates were a high 17 per cent, but today's variable rates are lower at six per cent.

They argued that the sacrifices young adults make now are incomparable to what they and past generations had to do.

However, Koch said new homebuyers are in a tougher spot than before.

For him, house prices had gone way up compared to what people earn, and this was happening faster than wages were growing.

'Back in the 80s, the average cost of an Aussie house was $70,000, now it's $700,000—ten times more expensive,' he said.

He explained that in the 1980s, the average salary was $19,000. In 2023, it was $94,000.

'So in the 80s, the price of a house was four times the average person's income,' he said.

'In 2023, it's eight times the average Aussie salary.'

He has also urged mortgage holders with higher repayments to call their banks and explore whether refinancing to a lower-rate loan is possible.

‘We urge people in mortgage pain to reduce the interest on their repayments as much as possible by shopping around for a better deal,' Koch said.

'When every dollar counts, 2024 should be the year of the new lender.'

The struggles of young Australians in the housing market are real and palpable.

Mira Almasri, a 35-year-old single mother, rents a one-bedroom apartment with her two children, aged nine and 14 in Mosman on Sydney's well-heeled north shore for $600 a week.

She has given up all hope of owning a Sydney home, stating, 'It's impossible to buy in Sydney.'

'Even if you earn loads of money, it's still hard. All my friends who have bought houses in the last two years say they are not happy at all because they are paying high-interest rates.'

Jacob Burrows, 22, an electrician from Perth, Western Australia, hopes to buy a property within the next 12 months despite interest rates being at their highest since 2012.

He has done a lot of research, including reading a book about a man who owned 30 properties by the age of 30.

However, he acknowledged that 'it's fairly hard at the moment because everything is so expensive’.

‘A couple of years ago, I wanted to try and understand the market to appreciate what's involved in buying a house,’ Burrows added.

‘I spent a year or so learning the housing market, and now I'm going to try to look for cheaper houses instead of buying one big one so that I can have a smaller deposit.'

Still, it’s not all rosy for older Australians.

On the other side of the spectrum, a report by Ageing in a Housing Crisis showed that having safe, secure, and affordable housing for older people has become increasingly difficult.

More older people also lived in marginal housing, as analysed by the Australian Bureau of Statistics census data and homelessness estimates.

The increase in housing costs, declining rates of home ownership, carrying mortgage debt into retirement, uncertainty in private rental arrangements, and the worsening shortage of social housing all indicate a widespread problem of housing insecurity.

This issue of insecure or unstable housing impacts people of all age groups. However, for older individuals, the challenges are exacerbated by factors such as limited income-earning potential, growing frailty, illness, caring responsibilities, an increasing need for at-home support, and age-related discrimination.

Key Takeaways

• David Koch delivered a stark message to older generations, pointing out how young Australians face struggles due to high interest rates and inflation.
• Research by Compare the Market indicates that recent homebuyers who purchased at market peak are financially worse off than those who bought homes several years prior.
• Older Australian homeowners have generally been cushioned from recent rate rises, having benefitted from increased property equity.
• Koch suggested that policymakers should consider ways to distribute economic pressures more equitably across generations.

Members, what are your thoughts on this issue? Share your thoughts with us in the comments below.

I don't think it matters how old you are. Young ones can't earn enough to buy a place, rents are through the roof, probably because the landlords are mortgaged to the hilt. I also believe some of its greed. The I got it, you want it, you pay my price is rife in this country at the moment. Only got to look at supermarket prices and it runs across the board. Banks, landlords and real estate agents all vying for the highest prices. We live on a part pension, defence pension (you could not live on that one by itself and it's also classed as income so we can't earn even if we wanted to) and a couple of supplements. We still have a mortgage as we bought when we were older and renovated instead of paying off the mortgage. It has stood us well till now. Moved to a rural area, now want to go back to the city closer to family. Will probably have to down size majorly as we don't want to go into a retirement village due to our hobbies. Not catered for there. I doubt things will improve as nothing has over the last 50 years.

 

[Knell]

Just stating the facts .

? I don't know what you are saying? I am just saying that I didn't see blame - just quoting the data.

 

[Sally G]

So if Kochie wants to generalise about boomers not really being affected by interest rates, then we can generalise about how millenials and Gen Z and all the other irrelevant names given to younger groups of people. They are the ones who seemingly spend big money on cafe breakfasts, and trendy clothes, and being seen in the right (expensive) places instead of saving their money. Or do they? I know young people who are working very hard to save for a deposit, and others who spend their money as soon as they get it.
Stop generalising Kochie, and let us live our lives as we think fit.

 

[Knell]

Tall Poppy Syndrome.

David Koch is 67. He studied accountancy and has had multiple jobs over several decades including:

1. Accountant;
2. Journalist;
3. Investor;
4. Investment Advisor;
5. Author;
6. Television Presenter;and
7. Public Speaker (not an exhaustive list).

The above jobs and roles are known as work.

Yes, he's wealthy. He's worked for years (19 of which required him to get up and out of the house by 4am).

He's still working.

But he's (now) a Tall Poppy and must be cut down. Onya Australia.

Well yes...how dare anyone be more educated and be paid commensurate to their skills!!!

 

[Annna]

Hummmm.
Jacob Burrows (the electrician) is on the right track. Younger people should buy a cheapie to start with (even if it’s in the country - where houses can be cheaper). Then, rent it out and work hard to make extra payments to build up the equity. Then sell & upgrade a little.
I think David Koch is pushing his own barrow a bit - suggesting people use the Compare The Market to get a better interest rate.
Anyway, when we started out, we had a first mortgage at 17% interest on a modest home (with 2 bedrooms, a shower (no bath) & toilet (no ensuite) no media room, no pool, no “open plan living” a single garage with a laundry in it…, As well as this, we had investment loan for a run-down fibro home at 17% interest. We both worked 2 jobs to get ahead, we shared cars to get to work (ortook a bus). No eating out and no holidays. Our first overseas holiday was in our late 50s.
Sorry to say, the younger generation (with the sense of entitlement) need their SUV (not public transport), sometimes a second car too, they want the media room, the ensuite, the double LUG, and all the bells & whistles...
I somewhat take offence at the notion that our (older) generation caused the current “difficulties” the younger generation is enduring.
My observation is that much of the younger generation want everything, they want it now and are unwilling to make sacrifices to get it.

Your journey sounds familiar.

No big house (a budget home), work (7 days a week some years), 17% interest rates (for years), no second car (hell, sometimes no car and yes buses and trains) and no travelling annual holidays over 3 decades.

I'm not sure the younger gens could cope with these circumstances.

Consumerism (mass advertising) and social media (peer pressure) contribute to their inability to live - what's the word? Oh yes, 'frugally', a word that now has a negative connotation.

If you NEED to have / buy everything, you'll spend all your income and rack up debt.

How in these circumstances will you ever save any money and I'm not just talking about a property deposit. I am saying how could you ever amass savings for a rainy day to get you over tough times that crop up from time to time.

 

[Mr Chips]

I am stepping into a danger zone here but I actually like Kochie as a man but his ideologies are somewhat suspect. The Comparethemarket company is rubbish in my opinion as they do not appear to compare all the available products in any particular market sector, it seems to be only the products that sign up with them. A good idea but fraught with problems. Also, once you are listed with them you are barraged by all sorts of offers which can get you into all sorts of issues.
Regardless of that, the main problem with finance over the last 8 to 10 years is the Banks who have not simply done one easy thing to protect their customers particularly in the case of cars and houses. Part of the requirement of any loan application is the applicants "ability to repay". In their urgent need to approve loans to "suitable applicants", the Banks rarely if ever would not take into consideration what would happen in the case of interest rate hikes. This was not particularly applicable to car loans as they were mainly at high fixed rates but a home loan was different. If for instance a large loan was affordable 3 years ago, is it affordable now and is it affecting the lifestyle of the applicant? In a majority of cases they are now struggling badly so, in my humble opinion it is the fault of the Banks not the Federal Bank who's job it is to monitor the financial status of the country.

 

[mylittletibbies]

? I don't know what you are saying? I am just saying that I didn't see blame - just quoting the data.

People don't want to consider the data Knell, it appears a lot of people just don't like Kochie and are taking a very biased view.
Not that fussed on Kochie myself, but the statistics are correct.

 

[Hyacyinth Bucket]

David Koch, the former Sunrise host and current economic director for comparison website Compare the Market, has pointed out something older Australiansmay not want to hear.

He has explained that younger Australians bear the brunt of soaring interest rates and inflation while their older counterparts remain largely unaffected.

The Australian housing market has been a hot topic of discussion for years, with prices skyrocketing and making it increasingly difficult for younger generations to enter the property market.

This issue has been exacerbated by the recent rise in interest rates, which according to Koch, has hit young borrowers the hardest.

View attachment 38953

It has been reported that younger generations have a hard time buying homes. Credit: Freepik

According to data from Compare the Market, homeowners who purchased property at the peak of the market in early 2022 are now finding themselves in a worse financial position each month compared to those who bought it three years earlier.

For instance, a Sydney homebuyer who purchased a property at the average price of $1.12 million in February 2022 and locked in a fixed rate of 2.2 per cent would now face minimum monthly repayments of $2,247 more than their current payment.

In contrast, homeowners who bought at the median price of about $780,000 in April 2019 on the same fixed rate have seen their repayments rise just $1,576 a month.

This means they are better off by $671 every month, or a total of $8,052 a year.

Furthermore, those who bought before the pandemic have benefited from a rise in equity as property prices have significantly increased over the past four years.

Koch has described this situation as a 'tough pill' for young Aussies who have not had time to save up.

'If you bought your home in early 2022 under the pretence that interest rates would stay low for longer, you've now been lumped with the short end of the stick,' Koch said.

'Meanwhile, a lot of mature Australians have missed this pain altogether after selling their properties at the peak and having reaped the benefits over more equity for years.’

'A lot of mature Australians have been shielded from the rate rises, and it's already widely believed that their spending drove inflation.'

A 2023 report from CommBank iQ found that spending among Australians aged over 35 appears to be fuelling Australia's inflation crisis as younger generations are forced to cut back on essentials.

Older generations were said to be going on holidays and dining out more often.

On the other hand, young Aussies were battling higher rents and mortgage repayments, reducing their spending to cope with the worst cost of living crisis in a generation.

Younger Aussies, particularly those aged 25 to 29, reportedly reduced their yearly spending.

View attachment 38954

Koch describes the current situation as a ‘tough pill’ for young Aussies. Credit: Freepik

Koch said, ‘It's time policy-makers should be asking: how could the pressure be more evenly spread?’

Many older homeowners have stressed that interest rates for home loans back then weren't as tough when looking at history.

In the late 1980s to early 1990s, home loan rates were a high 17 per cent, but today's variable rates are lower at six per cent.

They argued that the sacrifices young adults make now are incomparable to what they and past generations had to do.

However, Koch said new homebuyers are in a tougher spot than before.

For him, house prices had gone way up compared to what people earn, and this was happening faster than wages were growing.

'Back in the 80s, the average cost of an Aussie house was $70,000, now it's $700,000—ten times more expensive,' he said.

He explained that in the 1980s, the average salary was $19,000. In 2023, it was $94,000.

'So in the 80s, the price of a house was four times the average person's income,' he said.

'In 2023, it's eight times the average Aussie salary.'

He has also urged mortgage holders with higher repayments to call their banks and explore whether refinancing to a lower-rate loan is possible.

‘We urge people in mortgage pain to reduce the interest on their repayments as much as possible by shopping around for a better deal,' Koch said.

'When every dollar counts, 2024 should be the year of the new lender.'

The struggles of young Australians in the housing market are real and palpable.

Mira Almasri, a 35-year-old single mother, rents a one-bedroom apartment with her two children, aged nine and 14 in Mosman on Sydney's well-heeled north shore for $600 a week.

She has given up all hope of owning a Sydney home, stating, 'It's impossible to buy in Sydney.'

'Even if you earn loads of money, it's still hard. All my friends who have bought houses in the last two years say they are not happy at all because they are paying high-interest rates.'

Jacob Burrows, 22, an electrician from Perth, Western Australia, hopes to buy a property within the next 12 months despite interest rates being at their highest since 2012.

He has done a lot of research, including reading a book about a man who owned 30 properties by the age of 30.

However, he acknowledged that 'it's fairly hard at the moment because everything is so expensive’.

‘A couple of years ago, I wanted to try and understand the market to appreciate what's involved in buying a house,’ Burrows added.

‘I spent a year or so learning the housing market, and now I'm going to try to look for cheaper houses instead of buying one big one so that I can have a smaller deposit.'

Still, it’s not all rosy for older Australians.

On the other side of the spectrum, a report by Ageing in a Housing Crisis showed that having safe, secure, and affordable housing for older people has become increasingly difficult.

More older people also lived in marginal housing, as analysed by the Australian Bureau of Statistics census data and homelessness estimates.

The increase in housing costs, declining rates of home ownership, carrying mortgage debt into retirement, uncertainty in private rental arrangements, and the worsening shortage of social housing all indicate a widespread problem of housing insecurity.

This issue of insecure or unstable housing impacts people of all age groups. However, for older individuals, the challenges are exacerbated by factors such as limited income-earning potential, growing frailty, illness, caring responsibilities, an increasing need for at-home support, and age-related discrimination.

Key Takeaways

• David Koch delivered a stark message to older generations, pointing out how young Australians face struggles due to high interest rates and inflation.
• Research by Compare the Market indicates that recent homebuyers who purchased at market peak are financially worse off than those who bought homes several years prior.
• Older Australian homeowners have generally been cushioned from recent rate rises, having benefitted from increased property equity.
• Koch suggested that policymakers should consider ways to distribute economic pressures more equitably across generations.

Members, what are your thoughts on this issue? Share your thoughts with us in the comments below.

Housing prices are ridiculous in every state in Australia. Cost of living is also, now average wages $93k pa. Those stats are also ridiculous I worked 45hrs week my wages were half that amount I drove 4hrs every day for work. Problem I see at moment is younger gen what everything now bright & shiny & new. I took hand me downs from anyone couldn’t afford to buy new. I had parents dining table chairs that I sat at when I was a kid. Bed same it was 20yrs old lounge suit I bought for $300 second hand. Basically what I’m saying don’t buy what u can’t afford.

 

[Annna]

We started with a 2 bedroom house sheets up at the windows no floor coverings after 5years built an extension 2 bedrooms upstairs a sitting room and a bathroom then 1995 built our dream home 5 bedrooms 42 square home now in retirement from 2011 we have 7 acres and a nice home people nowadays seem to want the big house new car overseas holidays right from the start

I agree. I see younger people who do buy properties these days who NEED to renovate immediately.

Debt + more Debt.

In my time, I felt so lucky to be able to buy an old house (old and neglected by the former occupants) and to just live in it. The house stayed in its classical (rundown) form for years until savings were sufficient to repaint and tackle the kitchen and bathroom.

This save and refurb was an ongoing theme, until the house reflected my vision of a home. It took decades.

 

[Annna]

Well yes...how dare anyone be more educated and be paid commensurate to their skills!!!

Agree.

 

[mylittletibbies]

I am stepping into a danger zone here but I actually like Kochie as a man but his ideologies are somewhat suspect. The Comparethemarket company is rubbish in my opinion as they do not appear to compare all the available products in any particular market sector, it seems to be only the products that sign up with them. A good idea but fraught with problems. Also, once you are listed with them you are barraged by all sorts of offers which can get you into all sorts of issues.
Regardless of that, the main problem with finance over the last 8 to 10 years is the Banks who have not simply done one easy thing to protect their customers particularly in the case of cars and houses. Part of the requirement of any loan application is the applicants "ability to repay". In their urgent need to approve loans to "suitable applicants", the Banks rarely if ever would not take into consideration what would happen in the case of interest rate hikes. This was not particularly applicable to car loans as they were mainly at high fixed rates but a home loan was different. If for instance a large loan was affordable 3 years ago, is it affordable now and is it affecting the lifestyle of the applicant? In a majority of cases they are now struggling badly so, in my humble opinion it is the fault of the Banks not the Federal Bank who's job it is to monitor the financial status of the country.

Oh, somebody has put his brain into gear and made a sensible comment. I will now join you MrChips and wait to be shot down in flames.