Fading property dream takes emotional toll

11 April 2017

  • 55% worry they’re locked out of the property market rising to 68% of Gen Xers
  • 46% feel inadequate as a result of not owning a home
  • 43% can’t imagine feeling fulfilled in the future without owning a home

Fifty five per cent of first home buyers worry they’ll never own a home and for many the prospect is taking an emotional toll.

The findings come from a new study of 1,000 wannabe home owners by industry super fund-owned bank ME, in conjunction with clinical psychologist, Elizabeth Neal.

According to the study, as a result of not owning a home:

  • 46% feel inadequate
  • 43% self-blame, feeling they’ve made bad decisions financially or with money management
  • 43% can’t imagine feeling fulfilled without owning a home
  • 39% feel they have nothing to look forward to
  • 38% feel envious or jealous when others reach the property ladder before them, rising to 50% of Gen Ys

Study co-author, Elizabeth Neal said negative emotions stemming from non-home ownership are understandable.

“Property is such a hot topic in Australia with constant reminders everywhere you turn, so it's unsurprising many feel somewhat cynical and experience low self-worth as a result.

“Worries about non-home ownership can easily turn into feelings of inadequacy or humiliation when we’re reminded every day – whether it’s through the media, friends and family, or via social media.

"I’m not surprised half of Gen Y’s who don’t own a home feel the most envious or jealous when others get on the property ladder before them – Instagram and Facebook feeds are likely to be dotted with photos of acquaintances smiling proudly outside their first home.

“But before you question your own life-decisions, remember every person’s situation is different. We never really know how those around us are faring fiscally. Rather than wasting energy trying to keep up with others, focus on the one thing you can control – your own financial wellbeing,” said Ms Neal.

ME Head of Home Loans, Patrick Nolan, said “despite affordability pressures the ‘Great Australian Dream’ remains embedded in many Australians’ mindsets.

“The unfortunate reality is house prices have more than doubled in the past 15 years through several supply and demand factors, but particularly due to high investor demand driven by generous tax breaks and low rates.

“For those still striving to get their foot on the ladder, it’s important to stay positive and to consider alternative strategies, like buying an investment property, a unit instead of a house, joining forces with friends or family, or looking to neighbouring suburbs where properties may be cheaper.

Generation X hurting the most
ME’s research found Gen X was the hardest hit when it comes to the emotional toll of not owning a home.

Sixty eight per cent of Gen X respondents felt worried they won’t be able to get into the property market; 58% said they feel inadequate; 53% blame themselves and feel they’ve made bad decisions financially or with money management; and 35% said they felt humiliated; all significantly higher proportions than other generations.

Neal said the reason Gen X is hardest hit is related to their life stage.

“The need for security is fundamental to the human condition and our sense of belonging. It goes back to Maslow's hierarchy of needs – physical safety is the base need, followed by our social and emotional needs.
“Gen Xers are at the ‘settling down’ stage of their lives and security has become a higher priority. This generation grew up with the assumption that buying property is integral to becoming an adult.”

Non-home ownership can have a silver lining
Some respondents saw positives in non-home ownership. According to the study, as a result of not owning a home:

  • 42% said they feel like they have the freedom to explore other opportunities and grow in other areas
  • 34% feel liberated; like they have greater freedom
  • 33% said it enables them to lead a better lifestyle

Nolan said not owning a home certainly doesn’t mean you’ve run out of options to build wealth.

“Housing is unaffordable in many parts of the world but people continue to find other ways to invest their savings to build wealth for the future, like contributing more to superannuation or using the monthly savings they might have paid to a mortgage for another type of investment.

“Australians have become fixated by property as a means of building wealth and it’s worth talking to a financial expert to understand and explore your options. For many people not owning a home just opens another door.”

Complete findings

Reported negative impacts of not owning a home

Total Gen Y Gen X
I have felt worried that I won’t be able to get into the property market


55%


63%*

68%*
Has made me feel inadequate


46%


53%*

58%*

Means I’ve felt I’ve made bad decisions financially or with money management


43%


44%

53%

I can’t imagine feeling fulfilled in the future without owning a home


43%


58%*

48%*

Has made me feel like I have nothing to look forward to


39%


42%*

49%*

I’ve felt envy or jealousy when others get on to the property ladder before me

38%

50%*

46%*

Has negatively affected my ability to build wealth

32%

29%

41%*

Has felt humiliating

29%

33%*

35%*

Has negatively affected my retirement plans

27%

23%

30%

I’ve experienced conflict with others on the topic of housing unaffordability

25%

31%*

30%*

Has negatively affected my personal relationships

16%

17%*

18%

Has negatively affected my family planning (i.e. having children)

14%

24%*

14%


Reported positive impacts of not owning a home

Total Gen Y Gen X
Makes me feel like I have the freedom to explore other opportunities and grow in other areas

42%

45%

45%

Has made me feel liberated, like I have greater freedom

34%

28%

36%

Enables me to lead a better lifestyle

33%

27%

39%*


* Denotes significantly different.

-ends-

Note about the survey: Survey conducted by Pure Profile in February 2017; online survey completed by 1,000 non-home owning adults.

About the psychologist, Elizabeth Neal: Elizabeth is a Registered Psychologist and holds a Master in Behavioural Science, obtained through the University of Sydney and an associate member of the Australian Psychological Society. For more information, visit: http://elizabethneal.com.au