What we’re seeing in the market right now
If you’re a parent, you may wonder whether buying a house in Sydney will become out of reach for your kids. Especially when you look at today’s property prices and think about what the future might hold.
As a father of four, it’s a topic Byron Rose has given much thought to. In this two-part series, Byron shares what he’s seeing in the market right now — and the strategies he believes will make it more achievable for the next generation to get a foothold in the property market.
The property market: Then and now
Thirty years ago, the average house price was only a few times the standard annual income, according to the Grattan Institute.
Today? CoreLogic reports that the median dwelling value in Australia’s capital cities is now 8.5 times the average income.
And even if you’re in a dual-income household and able to service a mortgage, you might also be a parent — one who’s quietly worrying:
“What will happen to my kids when it’s their turn to buy a house in Sydney?”
It’s a keep-you-up-at-night concern, even for property veterans like Byron Rose.
“I’ve been in the property game for 30-odd years, and I still get shocked at the prices being paid for houses or apartments,” says Byron. “And I’ve thought to myself, where does this all end up? If something’s $2 million today, what will it be in 10 or 20 years?”
If prices continue to rise faster than wages, the gap between what young adults can afford and what properties actually cost will only widen — leading to greater inequality and fewer opportunities for future generations.
While increasing housing supply might seem like the obvious solution, it’s not that simple. Australia has one of the lowest levels of housing per person in the OECD — and the situation is getting worse, not better.
“The housing crisis has been going on for decades. Federal and state governments are trying to fill the void, but it’s gotten significantly worse. We’re not building as many properties as we should be,” Byron says.
Home ownership is slipping out of reach
We’ve all heard the old jokes about young people and avocado toast. But no one can deny that saving a decent deposit today is far harder than it used to be.
In the early 1990s, it took about six years to save a 20% deposit for an average home. Today, because of soaring house prices, that same deposit takes closer to nine or ten years, according to recent research.
That’s a major factor pushing home ownership out of reach for younger generations. In 1971, 64% of people aged 30–34 were homeowners. By 2021, that figure had dropped to just 50%.
And there’s another dynamic making it even harder for young buyers to compete.
“In Sydney — especially in the Eastern Suburbs — we’re seeing extremely wealthy families writing cheques for their sons or daughters to buy houses worth $10 or $15 million,” Byron explains. “It’s just a drop in the ocean for some of these families, but it keeps pushing property values higher. It’s going to another level entirely.
“And you have to wonder — what happens next? What about the grandchildren? It becomes a self-perpetuating issue.”
At the same time, investors who would traditionally help boost supply by developing new housing are also struggling to make the numbers work.
“We’re seeing developers and investors who can’t make projects stack up because construction costs are so high. To make a profit, they’d have to double the scale of their projects, which often isn’t possible under current planning rules,” says Byron. “It’s not doable — and it keeps getting worse.”
Enter: The Bank of Mum and Dad
While it’s difficult to predict exactly how Sydney’s chronic undersupply of housing will affect prices long term, Byron believes one thing is certain: doing nothing isn’t an option.
“If your child is going to buy a house in Sydney in the future, the worst thing you can do is sit back and hope for the best,” he says. “You need to be doing something — and doing it early. That’s what I’ve done with my own kids.”
There are strategies parents can use to give their children a better chance of entering the property market — and in Part 2 of this series, we’ll share Byron’s practical insights on how to make that happen.
👉 [Read Part 2: How parents can help their kids buy property in the future]
“If you want your kids to be able to buy property in the future, you need to have a strategy and a plan — and start early.”
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