Gen X holds the highest emotional toll of not owning a home

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

“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.

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.”

Some respondents saw positives in non-home ownership.

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

• 42 percent said they feel like they have the freedom to explore other opportunities and grow in other areas
• 34 percent feel liberated; like they have greater freedom
• 33 percent 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.”

Reported negative impacts of not owning a home

Reported positive impacts of not owning a home