Housing in Australia: Financial Journeys Through Affordability, Retirement and Climate Challenges
A paper presented to the joint conference hosted by ABS and RBA examining Australia's dual housing challenges and their impact.
Australia faces a paradoxical dual housing crisis: rising prices relative to wages in metropolitan areas create intergenerational inequity while climate-driven price declines in high-risk regions create geographic inequity.
In Housing in Australia , Actuaries Institute CEO Elayne Grace examines how both trends are fundamentally reshaping the financial journeys of Australian households.
In brief:
- Home ownership among 25 to 34 year-olds has fallen from over 50% to just 37% in two decades, with young Australians now facing house prices multiple times higher than previous generations.
- Approximately 15% of Australian households (1.61 million) experience extreme home insurance affordability stress, concentrated in climate-vulnerable regions.
- Housing status has become the critical "fourth pillar" of retirement, with homeowners enjoying disposable incomes 2.5 times higher than non-homeowners.
- Around 5% of households with home loans face extreme insurance affordability pressures, representing approximately $57 billion in outstanding loan balances at risk.
Australia’s housing challenges require integrated solutions across government policy, financial services and individual planning.
— Elayne Grace, CEO, Actuaries Institute
