05-Nov-2020 • Personal Finance
The economic impact of COVID-19 is being felt by young Aussies with almost 70% saying the ‘Great Australian Dream’ is harder to achieve for their generation, according to new research from ME.
ME surveyed 1,000 Gen Z and Gen Y’s in September 2020 on the Great Australian Dream − defined by owning a dream home, finding a dream job and retiring at or before 65 − and found 82% of young Aussies believe it was easier for past generations to achieve. Worryingly, 62% also fear their children / the next generation will struggle to achieve it.
When asked whether they thought certain milestones were now achievable for young Australians in the current COVID-19 world:
- 53% said finding a dream job (not just one that pays the bills) is unlikely.
- 58% said owning a dream home is unlikely;
- 65% said retiring prior to or at 65 is unlikely;
- 55% said they won’t have enough superannuation to support their future selves.
Additionally, as a result of COVID-19, 69% are delaying major life goals with close to half estimating it will take another 1-3 years to reach them.
Financial security weighs on the minds of young Aussies.
The confidence of young Aussies has been affected by the COVID-induced recession:
- 84% feel it’s harder to enter the labour market;
- 64% feel uncertain about their financial future;
- 66% are struggling to get ahead financially; and
- 37% are living week to week and struggling to keep afloat.
With the economic impact on young people being widely known, the Government’s recent budget included a variety of measures directly aimed at supporting young people enter the labour market. New programs include wage subsidies for new hires between the ages of 16 to 35 and increased funding for apprenticeships and traineeships.
“This is the first recession many young Australians have experienced and it will take some adjusting to,” said ME General Manager Home Loans, Andrew Bartolo.
“The reality is that some goals like travelling overseas or saving for a house deposit have sadly been put on hold while we navigate 2020.
“The best thing young Aussies can do right now is not to lose hope, but reassess their goals, upskill the management of their personal finances and seek support when they need it.
“There are a lot of helpful resources out there like ME’s Ed – school of money to help with budgeting and managing debt. If you’re feeling overwhelmed, don’t be afraid to seek help from your family and friends or the National Debt Helpline for free financial counselling − there is no shame in reaching out.”
Despite some bargain buys, young Aussies are battling to buy their first home
The prospect of purchasing a home has also been impacted by the economic crisis. Among the young Aussies striving to buy their first home before COVID-19 hit, over half (57%) indicated they would now be delaying or downgrading their real estate plans.
“We recognise it’s unprecedented times and the pressure on younger generations is mounting. Our goal at ME has always been to help everyday Aussies get ahead and we stand with Zoomers and Millennials to help ensure the Great Australian Dream can be a reality for them,” said Bartolo.
“As such, ME has launched one of its best-ever home loan offers, designed exclusively for first home buyers.”
Young women are feeling the impact more than men
Many female-dominated industries such as retail, hospitality, hairdressing and beauty have suffered major setbacks in the wake of COVID-19. In Victoria alone, women represent 61% of all jobs lost between February and July.
ME’s research shows this has in-turn affected the mindset of young females:
- 71% believe it’s unlikely they’ll retire before 65 compared to 59% of men
- 52% believe it’s unlikely they’ll pay off student debts compared to 37% of men, and
- 56% believe it’s unlikely they’ll find their dream job compared to 49% of men.
What’s does the new Aussie Dream look like in 2020?
Young Aussies were also asked to describe the ‘Great Australian Dream’ before and after COVID-19. Before COVID-19 a wishful, abundant and hopeful scene was described:
“A belief that in Australia, homeownership can lead to a better life and is an expression of success and security.” – Gen Y male living in New South Wales.
“Before COVID-19, I considered that the ‘Great Australian Dream’ was to travel and discover all the impressive and magical corners that this island hides. And also soak up its culture.” – Gen Y male living in Queensland.
“Owning a house with your significant other and having a dog. Working hard, but also being able to reward yourself with vacations/holidays and things that you want and need.” – Gen Z woman living in Queensland.
“Having a secure job, travelling, building a dream house, having kids, growing old with your partner.” – Gen Z woman living in Victoria.
In contrast when asked to describe the new ‘Great Australian Dream’ with COVID-19’s impact in mind, young Australians’ responses were stark and practical, with the wishful tone diminished:
“Resigned to the fact that you need to be content with renting a decent enough apartment in the larger cities where more jobs may be found.” – Gen Y man living in New South Wales.
“Paying the rent and bills on time.” – Gen Y female living in New South Wales.
“Just having a stable income and good health.” – Gen Z man living in Queensland.
“Finding a stable job and being able to afford the basic necessities.” – Gen Y man living in the NT
“As the title suggests, it’s just a dream.” – Gen Y man living in New South Wales.
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Editor notes: ME’s Aussie Dream Survey was conducted with 1,000 Australian adults aged from 18 to 39 nationally representative by sex and location in September 2020 via insights provider, Pure Profile. Respondents were asked to choose ‘all that apply’ for some questions, hence why percentages when added up exceed 100%. Generational definitions: Gen Z = 18-24, Gen Y = 25-39