Although billions have been committed in housing incentives, many Millennials and Gen Z individuals are choosing not to enter the property market, driven by anxiety about mortgages and financial risks linked to owning a home. Research from Macquarie Business School highlights a shift in attitude, with fear of debt - not simply affordability - acting as a barrier to uptake of schemes like the 5% deposit guarantee.
The government has introduced a wide range of incentives to support first-time buyers. Between 2011 and 2021, more than $20 billion was invested in grants and concessions aimed at improving home affordability. More recently, the federal government extended an initiative that allows buyers to purchase a home with a 5% deposit. In October alone, around 5,778 properties were bought through this program, suggesting some level of success. However, participation remains relatively low among young people who are especially cautious about taking on debt.
Researchers found that nearly one in four young adults surveyed deliberately avoided incurring significant debt, with many citing emotional discomfort and perceived risks. While financial experts tend to view debt as a manageable tool, younger Australians often see it as a source of prolonged stress and a liability, particularly in an uncertain economic environment that includes interest rate increases and job market instability. Even when programs reduce initial costs, the prospect of large loans and long-term interest repayments still acts as a major deterrent.
This trend could have broader implications. Australia's retirement system is built on the assumption that most people will own a home. If younger generations continue to avoid property ownership, it could affect future economic projections. Experts warn that avoiding mortgages now might result in higher rental costs during retirement and less financial stability overall.
