Peter Costello issues a wake-up call to young Australians complaining about house prices

Nine’s chairman and former federal treasurer Peter Costello has claimed that young Australians prioritize holidays abroad over saving for a down payment on a house.

Mr Costello shared his thoughts during an interview with John Anderson, former Deputy Prime Minister of Australia under John Howard from 1999 to 2006.

His comments come just a month after a poll showed young Aussies and middle-income earners in Australia are giving up on ever owning a home.

“It’s amazing how many young Australians don’t believe they’ll ever own a home,” said Anderson, highlighting the numbers.

And if they do, it will be by inheritance. They see themselves as unable to work their way into it. So they don’t feel invested.

“You have people who can’t start a house, who don’t feel they can start a family with it, and our birth rate is actually falling considerably.”

Mr. Anderson asked Mr. Costello why young people lean on policies that exacerbate the things they worry about.

Mr. Costello replied, “I think when you’re young and don’t pay taxes, you tend to think that whoever pays taxes must somehow solve my problems.”

“And until you start paying taxes yourself, you don’t realize there’s a cost-benefit ratio in all of these policies.

Mr Costello said homeownership is very important to young people, but lifestyle choices came at the expense of their homeownership aspirations.

“They expect to be 90 or 100. They expect to have four or five jobs. They would rather travel than put down a down payment on a house. It’s lifestyle,’ he said.

Mr Costello warned that rising interest rates and inflation would come as a shock to many young Aussies.

“If you’re young and grew up in our country, you haven’t really seen a recession in 30 years,” he said.

Mr Costello also admitted that ‘standards had changed’ over the last 30 years.

“If you go back 30 years ago, we had much smaller houses, but four people lived in them.

“Now we have houses that have doubled in size, but the average household has halved in size, so they expect a lot more from the standards,” he said.

Mr Costello said research had shown that the biggest difference between a secure and an uncertain retirement was home ownership.

“You can live on a pension if you have your own home,” he said.

“But if you’re still renting at 60, you’re under a lot more pressure.”

Mr Costello’s comments come after a Resolve Political Monitor survey published last month found that young and middle-income earners in Australia are giving up on ever owning a home.

Two-thirds of the 1,609 surveyed agreed that young Australians will never be able to buy a home.

Jim Reed, director of Resolve, said high house prices and rents discouraged young people from entering the real estate market.

“Many young people have simply given up on the dream of owning a home, at least early in their careers, and some even tell me they give up on starting a family because they can’t afford to take care of themselves , just more mouths,’ he said.

Economist Saul Eslake, a longtime critic of Australia’s housing policy, said the situation has gotten so bad it is undermining living standards for generations to come.

“I don’t understand why young people today don’t take to the streets to protest their parents and their grandparents for what they’ve done with the cost of housing in this country,” he said.

An average-skilled Australian who wants a home is now almost locked out of the inner cities or villages near the beach unless they are willing to live in a flood zone.

Financial Comparison Canstar calculated that someone with an average full-time salary of $94,000 could only borrow $436,000.

Therefore, if the potential home buyer could raise a 20 percent down payment of $109,000, they would only be able to buy a house or unit worth $545,000.

That’s less than half of Sydney’s median house price of $1,217,308, even after falling 14.7 percent in the year to February, CoreLogic data showed.

The middle-income Australian would now also be missing out on the mid-market house in the more affordable but isolated capitals such as Perth where $587,274 is the midpoint and Darwin where $585,836 is the median.

They are also priced outside Melbourne, where $897,222 is the median house price, after an 11.2 percent drop, along with Brisbane, where $767,781 is the midpoint, after an 8.6 percent drop.

Ex-federal treasurer denounces Covid overreaction, claiming there was more freedom in Australia during World War II: ‘How did we put up with that?’

Later in the interview, Mr Costello accused Australia of “overreacting” to Covid and subjecting residents to “draconian” and “unnecessary” restrictions.

He told Mr Anderson that governments across Australia went ‘too far’ when they closed workplaces and introduced daily curfews in 2020 and 2021.

Mr Costello said Australians were not forced to stay in their homes past 9pm even during the Second World War.

“When you look back on it, you say, how did we endure that invasion of individual freedom,” he said.

“The government had huge reach, the government had huge media influence, they held daily press conferences and scattered bodies all the time.

“The idea that if you went out of your house for more than an hour a day, you could die, or worse, you could infect someone who could die.

“But somehow you’d be safe if you only went out for 59 minutes.”

Australia had one of the strictest lockdowns in the world with state leaders closing borders and implementing draconian stay-at-home orders for millions of residents.

Western Australia closed its borders to the rest of Australia in March 2020 and enforced borders between regions in the state in April.

Prime Minister Mark McGowan finally lifted the hard border with other states and territories for all Australians and triple-vaccinated travelers from overseas in March 2022.

However, it was Melbourne residents who suffered the longest lockdown in the world, with a total of 262 days of strict stay-at-home orders.

People could only exercise within a three-mile radius of their homes and were restricted by a nightly curfew from 9 p.m. to 5 a.m.

Similar rules were enforced in Sydney, with the army deployed to ‘hotspot’ areas such as the South and Southwest to ensure residents adhered to lockdown rules.