I believe that the millennial generation is not rejecting home ownership, they are rejecting the servitude and constraints that traditional housing models and mortgages impose.
Last weekend, former Bank of Ireland chief Richie Boucher told an interviewer that millennials do not aspire to homeownership to the same extent that their parents did, and I understand the premise of what he was saying. Certainly, it appears to be the case that this generation has a very different mindset to the one that went before it; they do not crave security in the same way. I absolutely agree that they do not want to fall into the trap of 35-year mortgage servitude; they aspire to live more mobile and increasingly global lives, but to say that they do not ever want to own their home is perhaps a tad convenient. If anything, they are coming to the difficult realisation that that particular dream is moving beyond their reach.
“But let’s be clear about this, it is not a rejection of homeownership, it is the rejection of a broken housing model.”
By the way, it is important to acknowledge that not every want to buy their own home, and that’s fine; however, lifetime renters will need to start investing in an income-producing asset (not necessarily property) that will replace their incomes after retirement age. Given the trajectory of rental prices in Dublin, the uncertainty of our State pension system and shallowness of its reserves, people who choose not to own their own home will need to make alternative arrangements for the payment of rent into old age.
There was little positive to take from the latest Daft.ie Rental Report
The stock of available rental properties in Dublin fell again this quarter, down 15% year-on-year to fewer than 1,350 houses and apartments. As predicted, last year saw double-digit rent increases, despite the Government extending the Rent Pressures Zones (RPZs), with average monthly prices in the capital now close to €400 more than at the peak. South Dublin remains the most expensive area of the country in which to rent, with average monthly prices of €1,995. Leitrim remains the least expensive area nationwide, with average monthly rents of €542.
You can listen back to a NewstalkFM piece I did earlier this week on why rent increases aren’t news anymore; it doesn’t make for happy listening…