Donggang’s home has doubled in value since he bought — but he’s not happy about it
- by Admin
- July 18, 2024
When Donggang Shi bought his home on Brisbane’s southside 12 years ago, the purchase price was $450,000.
These days, similar homes in his suburb are selling for more than $1 million.
“Sounds like good news for us, but we don’t really think so because it’s difficult for our next generation,” he says.
Home ownership is a cornerstone of the Australian dream — but for many it’s becoming increasingly out of reach.
Across the country, property prices have seen a marked increase since the onset of the COVID-19 pandemic — and it’s an issue felt profoundly in the sunshine state, where values have jumped from the city to the suburbs.
Brisbane is now the second-most expensive city for housing in the country, with the median property price rising to $843,231, according to CoreLogic data released in May.
Dongang fears what that means for his daughter and her partner, who are now searching for a home.
“They’re kind of raising their budget higher and higher to the point that they couldn’t afford any more,” he says.
‘How are our peers able to afford homes and we’re not?’
Dongang’s daughter is hoping to buy an apartment or townhouse in Brisbane’s inner-south, but the young couple are looking at a price tag of at least $800,000.
His daughter hasn’t asked for family assistance, but he says if property prices continue to follow the same trend, the bank of mum and dad may be the only option.
According to the Australian Housing and Urban Research Institute (AHURI), those with financial support from family members are twice as likely to enter the property market as those without it.
But for people like Andrew, who earns an above-average wage, that’s not an option. He worries about what that means for those without generational wealth.
The market he’s trying to buy into, a fast-growing regional centre in Queensland, is quickly escaping his budget.
“We were asking, ‘How are our peers able to afford homes and we’re not’?” Andrew says.
“The answer, invariably, was they got money from their parents.”
‘It’s a difficult balancing act’
According to research released by AHURI, successive cohorts of Australians have experienced lower rates of home ownership at any given age, with the increased savings needed for a deposit or down payment proving a key barrier.
It found that “parental direct and in-kind transfers are associated with more rapid transition into first-time home ownership”, with bequests and parental transfers “more likely to flow to home-owning individuals”.
“The net effect of such transfers is to increase wealth inequality over time,” it noted.
Real Estate Institute of Queensland CEO Antonia Mercorella believes the fix to the state’s housing crisis ultimately lies in boosting stock.
But she says the situation could also be improved by other solutions, such as changing the deposit and Lenders Mortgage Insurance (LMI) requirements.
“The number of people that we speak to that say to us, ‘I know I can service the mortgage’,” she says.
“That [20 per cent deposit] is often the obstacle they just can’t overcome.
“It’s a difficult balancing act because, to be fair, we’ve seen the banking industry come under fire when they’ve had lending policies that are too liberal.”
‘Like a garden hose on a bushfire’
All sides of politics, from state to federal, are aware how important home ownership has become.
With the Queensland election looming — and a large percentage of the voter base being either first home buyers or parents of a future home owner — the issue is front and centre for residents.
Andrew says current efforts to address the situation “feel like a garden hose on a bushfire”.
The Queensland government recently lifted the threshhold on stamp duty concessions so they apply to properties valued up to $700,000, and has committed to building a million new homes by 2046.
Meanwhile, the LNP has become the first party to create a shadow ministry for home ownership, saying if it wins government in October it will create a $165 million shared equity scheme to allow 100 people with a two per cent home deposit to access government assistance.
Donggang isn’t sure how he’ll vote in October yet, but he wants to see meaningful action from both sides.
“I think whoever is elected should make it a priority and try their best to regulate the prices,” he says.
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