It’s no secret that young Australians have been struggling to save up for a home deposit – and this might be why.
A new report has revealed the reason young prospective buyers are missing out is a result of historically low wage growth between 2012 and 2022, accumulating to around $600 billion in lost wages.
The report, ‘The Lost Decade,’ by Per Capita has shown how much the average income earner lost in those 10 years due to low wage growth, while the appreciation of housing skyrocketed at alarmingly unequal rates.
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A Per Capita Study has revealed Aussies have suffered from historically low wage growth for over a decade.
The statistics revealed wages during this period jumped only 0.2 per cent annually, meaning the average wage in 2025 stands around $12,000 lower than what it would have been if the increase remained consistent with the historical average.
“Data from Australia’s major banks shows that the typical first homebuyer is a couple in their mid-30s borrowing just under $500,000,” lead author Emma Dawson explained.
“If they had enjoyed the same wage growth as their parents did early in their careers, they would have earned an additional $54,000 each over the Lost Decade. Combined, that would have been enough for a 20 per cent deposit on their first home today.
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Losses due to sluggish wage growth totalled $600 billion.
“In late 2022, almost two-thirds of young people told Per Capita’s Australian Housing Monitor that the only way they would ever be able to buy a home was if they got a large inheritance.”
The lack of growth combined with increasing house prices has played a share in freezing the Millennial and Gen Z population out of the housing market, believing their only avenue could be with help from parents of family.
Young Australians fear the only way into the market is to rely on help from family.
“Young Australians today believe that someone they love will have to die before they can achieve the great Australian dream of home ownership. This is a damning indictment of the loss of social mobility in a country long considered the land of the fair go.”
However, the report also revealed that since September 2022, real wages have begun to grow again.
The wage share of national income has risen by 3.8 percentage points since and the profit share falling by 4.6 percentage points between September 2022 and December of last year.
As a result, housing affordability could be on the horizon, and there still may be hope for young home buyers.
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