Soaring rents and stagnant wages force majority of Australian renters to abandon their dreams of home ownership

Rising costs and stagnant wages have forced the majority of Australian renters to quit saving for a house deposit.
A survey of over 1,200 renters conducted by financial comparison site Mozo revealed that 70% of those not saving claim it is unaffordable, with 36% saying it is because of a lack of income and 34% blaming the impossibility of saving on their own.
There is also a growing gap between housing costs and wages. While capital city house rentals now command a median of $650 per week, rental prices have surged by 8.3% in the year to September 2024.
On the other hand, wage growth has limped along at just 3.5%, with median weekly earnings at $1,396, according to the Australian Bureau of Statistics (ABS).
The disparity becomes even more pronounced when examining long-term trends. The average mortgage size has ballooned to $642,121, representing a 74% increase over the past decade. During the same period, real wage growth has crawled at a mere 5.88%.
Interestingly, not all renters view their situation negatively. One in five respondents indicated a preference for renting over property ownership, making it the third most common reason for not pursuing homeownership. This shift in mindset suggests a changing relationship with traditional property ownership aspirations.
Current market conditions make it difficult for prospective buyers in the market. For instance, a standard Australian home price is said to stand at $985,900 since September 2024. Most would-be buyers will have to commit themselves to saving nearly $200,000. At a saving of $1,000 per month, this puts one on an almost 17-year journey toward saving the amount needed.