Paid baby boomers were attacked for refusing to solve the housing crisis when it became clear that wild income was needed to buy a home

The Reserve Bank of Australia (RBA) warned borrowers to expect a fall in interest rates this year as the base rate was left at 4.35 percent. There is no doubt that this is contributing to property price problems.

But the cost of buying a home has hit record highs again, and with it the amount Australians need to earn to afford a home. To buy an average house in Sydney, you need an income of $263,000 per year.

There is a group that claims Australians are contributing to rising prices by restricting housing supply, all in the name of preserving the advantages they created decades ago before the huge population boom.

“All of these boomers have an incredible amount of wealth locked up in their homes,” Dr. Max Holleran Yahoo Finance. “We’re not asking them to move, we’re just asking to build something bigger next door so we can live in the same neighborhoods they’ve enjoyed for 30 years.”

Do you have a story? Email [email protected]

Make room for change so others are not left behind

You’ve probably heard of the movement, or maybe even the countermovement.

The group campaign under the slogan “Not In My Backyard” (NIMBY) gave birth to the group “Yes In My Backyard” (YIMBY), a conflict often seen as political and generational.

The wealthy, older homeowners who bought when it was cheaper (and often with government subsidies) are now rejecting new developments and high-rises that would open up housing in their area. Some are even able to buy a new property without taking out a mortgage: paying cash up front.

Younger Millennials argue that they can’t afford to buy because nothing they can afford is being built in a place they would actually like to live.

RELATED

The story goes on

Holleran, a lecturer in social policy at the University of Melbourne, acknowledged there is no panacea for reducing rental or sales prices. But said cities need to start focusing on building, not on ever getting the housing crisis under control.

“People need to understand that cities are going to change, and it just happens,” he said.

The author of “Yes To The City: Millennials And The Fight For Affordable Housing” said opposing development in areas that are “not really dense enough” creates problems for those expected to rent further out or buy because they commute for too long and often do not have access to acceptable amenities.

Holleran is not alone. New research from Finder found that 58 percent of real estate experts believed the NIMBY movement had driven up prices across the country by fighting development.

“The NIMBY attitude has resulted in densely populated housing being pushed further out of city centers, putting pressure on public transport and causing inner city property prices to be extremely high,” said Finder’s Graham Cooke.

Leanne Pilkington, CEO of Laing+Simmons and president of the Real Estate Institute of Australia, said she understands people may not want their neighborhood to be dominated by high-rise apartments.

However, she claimed “too many local authorities have taken responsibility for providing new housing” and was among those calling for higher housing densities.

Holleran said there was a “soft density” that could be adopted in Australia. This would mean that townhouses or small apartment buildings would have to be built over high-rises, which some NIMBY supporters say would reduce the value of their properties.

There are also issues such as the lack of social housing, negative leverage and intergenerational wealth transfer that need to be addressed, Holleran added.

Property prices are being hit by a lack of supply, and new data from Finder shows the Australian dream of owning your own castle can be a pipe dream unless you have decades to save (or expect help from family).

The average Australian living in NSW now has to spend around 22 years saving for a deposit on a house and 15 years for a unit. Things are a little better a little further south, where in Victoria you only need 16 years for a house and 11 years for a residential unit.

Cooke said it was becoming increasingly difficult for people across much of Australia to afford a home because the minimum salary required was well above average.

Minimum household income required to afford a house

Potential home buyers in Sydney need to earn $263,000 to comfortably service their mortgage, while those in Melbourne need to earn almost $170,000 a year.

Brisbane’s minimum salary to avoid mortgage stress is $165,000, while Canberrans must earn $185,000.

“People living in major capital cities now need a significant household income to comfortably service the average mortgage without even thinking about saving for a deposit,” Cooke said.

But it’s not just those willing to buy who face hurdles. Research from Finder found that more than a third of homeowners struggled to pay their mortgage in April, while the figure for renters was even higher at 42 percent.

Get the latest news from Yahoo Finance – follow us on Facebook, LinkedIn And Instagram.