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Shkruar nga Katrina Scalise
Home ownership is becoming increasingly unattainable for young people across the globe, in the face of record-high house prices, a cost-of-living crisis and high debt. Economic change is changing the very nature of societies...
Young people are buying fewer homes, and it's not their choice. According to The Economist, homeownership among this age group is falling globally. Rates are also falling in "some of the largest, most advanced economies."
Experts say this is a result of rapidly changing job markets, shortages and inflation, which have prevented young people from fulfilling a dream held for generations. Among the regions of the world where incomes have not kept pace with housing prices are Southern Europe, Asian cities and most English-speaking countries.
According to Eurostat across Europe, the home ownership rate among young people aged 25-34 fell from 25 percent in 2005 to 11 percent in 2018. In Southern Europe, home ownership rates under the age of 35 have fallen by over 10 percent for those born in the 1980s.
According to the World Economic Forum, only 50 percent of young people in this demographic group own their own homes. This fact has huge social costs. Because young people who cannot afford to buy a home are more likely to delay starting a family.
Coupled with the cost of living crisis and falling birth rates worldwide, the issue of home ownership has far-reaching consequences. In Spain, the Barcelona Institute for Urban Research, pointed out in October 2024, that many renters will no longer be able to own a home even when they are adults, or even in old age.
This shift is particularly worrying because it limits the ability of young people to accumulate wealth through property ownership, one of the main paths to financial stability for previous generations. Meanwhile, in Italy, the declining number of young homeowners is destroying the basic fabric of society.
In this country, the trend of houses as an investment and traditional symbol of family dominates. About 74 percent of the population lives in the homes they own. But stagnant wages, high youth unemployment rates (34.7 percent) and rising interest rates on loans are making it increasingly difficult for young people to buy homes and start families.
Even in Greece, young people cannot afford to buy a house, so they are forced to live with their parents longer. On average, a Greek leaves the family to live independently at the age of 30.7, and more young people aged 18-34 live with their parents than the average European youth.
This dynamic worsened during the Great Recession, after which Greece struggled to restore homeownership rates to their pre-2008 levels. The economic crisis discouraged young people from saving, and since then house and rent prices have risen.
As of 2021, over a third of household disposable income in the country is allocated to housing-related expenses, the highest among EU countries. Housing remains unaffordable even in the UK's major cities.
The crisis has accelerated since the start of the cost-of-living crisis in 2021. Higher costs of food, electricity, and fuel, which were fueled by the Russia-Ukraine war and sanctions on Russian oil, have driven up inflation in the country.
Two million aspiring homebuyers don't think they'll be able to do so. That's because house prices have risen sharply, especially in London, one of the most expensive cities in the world. Other English-speaking countries are suffering from a combined cost of living and housing crisis.
In Sydney, Australia, the average house price has surpassed 1 million Australian dollars ($652,000). The city is known for having some of the highest cost of living in the world. The housing crisis is also acute in Japan.
Last year, a study by the Real Estate Economics Institute found that the average house price in the Japanese capital Tokyo has increased for the third consecutive year and the prices of new apartments have risen for the fifth consecutive year.
The average price of an apartment in Tokyo is 15 times higher than the average annual salary of a highly educated worker. Young people looking to buy a home to raise their families are forced to look outside Tokyo, in the suburbs.
Compared to its southern neighbor, the average home price in Canada was $30,000 higher than the U.S. average in 2022. Prices hit record highs after the Covid-19 pandemic. High home prices have made many young people in the greater Toronto and Vancouver areas skeptical about the possibility of buying a home in the future.
According to a 2023 Mortgage Pros survey, nearly half of Canadian renters, of whom young people make up the largest group, have given up on their goal of buying a home./ Adapted from "Pamphlet" by "Worldcrunch"
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