Residz Team 4 min read
For many decades there have been common and expected rites of passage for many young Aussies.
It was a given that most young people, having finished school, would perhaps widen their view of the world with a gap year of travelling, return to start work or university, move out of home, start a career, save a deposit, buy a house and start a family.
But in the past few years these rites of passage have been upended.
The rising cost of housing and education means adult kids are living at home with their parents longer, which can impact their ability to participate in traditional rites of passage such as living together, getting married, or starting their own families.
Choosing to travel for an extended period of time can mean being in debt or having to spend your home deposit savings.
Travelling overseas isn’t as cheap as it was. Airlines hoping to recoup substantial losses during COVID and facing high fuel and other costs have lifted fares to popular destinations.
According to The Guardian’s story “Australians face 50% hike in air fares to fly to Europe this year, data suggests” on average airfares for a European summer trip are 46% above last year and 63% above comparable pre-pandemic fares.
And the recent Southern Cross Travel Insurance “The Future of Travel 2023” study shows nearly half (48%) of Australians who plan to travel say they are less likely to travel overseas this year due to the rising cost of living.
Young people aren’t necessarily earning or saving more to pay for these higher costs.
According to the Sydney Morning Herald, AMP chief economist Shane Oliver expects wage growth and inflation to both reach 4 per cent by the end of the year, resulting in flat real wages for 2023.
Aussies are no strangers to picking up a bit of work on their travels to make ends meet, however, many of them are taking their work with them on holiday - for a so-called “workation.”
Once back in Australia, young Aussies used to knuckle down to a career while living in a rental home, saving up a home deposit. But for those keen to live out of home, rent now accounts for much of their income.
Everybody’s Home, a coalition of housing and welfare organisations, says rents have now risen by more than a third in some parts of Australia (no doubt causing housing stress).
And, it says, even if interest rates come down it’s unlikely rents will follow suit.
Spokesperson Maiy Azize says renters won’t get a break from the soaring cost of housing, like mortgage holders can, when interest rates stabilise or start decreasing.
“Renters have been feeling the pain of rising costs for years, with rents surging even when landlords were benefiting from record low interest rates,” she says.
So, young people are setting up home in their “micro-apartment” bedrooms at the family home or spending a fortune on rent, as well as spending more on essential goods and services, and saving for a costly overseas trip.
They’re also unlikely to be able to buy a house. In 2022, a Finder survey found that 37% of Australians say they’ll never afford a home.
Among gen Z non-homeowners, the percentage who feel they will never be able to afford property increased from 6% in 2021 to 15% in 2022, while for millennials it grew from 21% to 34%.
If they do decide to try to buy a property, it’s more likely to be an apartment, and apartment prices reveal they are bucking the trend of a slowing housing market.
Andy Web, writing for Open Agent, says that on an annual basis, units have broadly outperformed houses, a trend that could continue in 2023 partly due to buyers shifting their search from houses to units due to reduced borrowing power and poor affordability.
Even owning an apartment as a single person or couple is largely out of reach. As a result, many young people are trying “rentvesting” or sharing the ownership of property.
And, having a family is a rite of passage that is changing too. Since 1976, Australia's total fertility rate has been below replacement level (about 2.1 births per woman).
In 2020 we saw the lowest total fertility rate ever reported (1.59) in Australia, according to the Australian Institute of Family Studies. It rose slightly to 1.7 in 2021 and around 1.8 in 2022.
It seems the great Australian dream of travelling, renting and then buying a house, and starting a family are rites of passage that are probably reserved for the privileged.
I expect new rites of passage are emerging, and these traditional ones will adapt or be replaced to take into account the changed economic and social circumstances and changing values and beliefs. It is just hoped that those new rites will offer young people a meaningful and positive future.
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Photo by Dakota Corbin on Unsplash