A newly released report confirms what many of us probably suspected: the aspirations of Australians have changed. The Financial Freedom Report, compiled by social research agency McCrindle, reveals fewer Australians are pursuing the dream of homeownership.
Ideals such as a house on a quarter-acre block with a manicured front lawn have been supplanted. For gen X and gen Y Aussies, embracing the concept of financial freedom entails achieving a work/life balance. If that means not owning their own home, so be it.
Commissioned by wealth managers Insignia Finance, the report shows that we haven’t entirely given up on the ‘great Australian dream’. However, it has dropped down a rung or two on the Aussie ladder of life aspirations.
“Australians still do desire homeownership,” the report concludes. “But the reality is that most Australians would prefer to be in a strong and secure financial position, as this can provide the freedom to enjoy life without financial stress.”
Broken down by generation, baby boomers (those aged 58 to 76) and gen Y (43-57) put financial freedom (independence) first. For the ‘builders’ generation (age 77+), taking regular holidays came in at number one. That’s probably not surprising given that many will have already attained their goal of financial independence.
For gen Y (28-42), the number one aspiration is a good work/life balance. For them, the vision that many of us over-50s had – working hard until retiring in our 60s – is redundant.
What does the Financial Freedom Report say about our children and grandchildren?
One, perhaps surprising, finding to come out of the report is what our youngest adult Australians are seeking. The Financial Freedom Report reveals that 63 per cent of gen Z (age 13-27) Aussies still aspire to be homeowners.
This seems surprising but the devil is in the detail here. That number represents the proportion of gen Zs who would like to own a home. But of those who do, less than a third rate it more important than other ambitions. “For gen Z, it is more important to attain their dream life (71 per cent) than to own their dream home (29 per cent),” the report states.
Are Australians becoming more financially literate?
Given that 22 per cent of Australians are not happy with their current financial status, you would hope so. The good news revealed by the report is a strong willingness in our younger generations to improve financial literacy.
McCrindle founder and principal Mark McCrindle spoke of this willingness following the release of the report. “According to the research, Australians are demonstrating this positive attitude in the pursuit of financial independence,” he said. That might be “through spending more time working to increase their financial knowledge or actively seeking the tools to help them do so”.
The McCrindle report ties together the threads of data it collected into what it calls the Financial Freedom Index (FFI). It is designed to measure how Australians are positioned to live a life of financial freedom that allows them to achieve their dreams.
Using three key measures – foundation, behaviour and attitude – an FFI score ranging from 0 to 100 is derived. Anything above 50 indicates an individual is well-positioned to achieve their dreams.
So how did Australia do? According to the report, we scored 49. As a nation, we are almost well-positioned to achieve our dreams. Whether those dreams are owning a home or a better work/life balance, they should still be attainable.
Have you detected a change in aspirations in younger Australians? Do the younger members of your extended family still dream of owning a home? Why not share your thoughts in the comments section below.
Also read: Is owning your home better than super?
In the current climate of ever rising interest rates, home ownership is being put further out of reach of the Ordinary Citizen.
In the future, if the rises keep happening, Home Ownership will only be for the Rich.
Me, I am an Age Pensioner with a Mortgage, with the repayments going up just about every month, but income virtually static.