Buying a home twice as hard for young casual workers than young permanent workers, research finds

Media Release

The last twenty years have pushed home ownership out of reach for many young Australians, but young casual workers are 52% less likely to become homeowners than those working permanently, a new study from the University of Melbourne has shown.

Published in the Australian Economic Review, the study looked at the effect of various socio-demographic factors, such as type of employment contract, on whether someone aged between 18-39 became a homeowner.

Dr Inga Lass, from the Melbourne Institute of Applied Economic and Social Research, used longitudinal data of 12 689 individuals collected between 2001-2023 through the Household, Income and Labour Dynamics in Australia (HILDA) Survey.

The study showed that in 2001, approximately 32% of young Australian workers aged were employed on fixed-term or casual contracts. By 2023, that proportion had declined to 29%.

The research found year-on-year young people on casual contracts were approximately 52% less likely to become homeowners than permanent workers, while those on fixed-term contracts were 14% less likely.

“Obviously casual workers tend to work fewer hours and earn less money than someone working in a permanent job, but I found this isn’t the only factor that stops them buying a house. The lack of job stability and the banks’ reluctance to give a loan to a casual worker even if they have a high wage also contribute to making a large demographic of Australians far less able or willing to enter the property market,” Dr Lass said.

“It’s worth remembering that these work situations are not necessarily voluntary. People in temporary employment are also far more likely to be underemployed than other workers, so they may not be working as much as they want to.”

The study also showed that the negative effect of casual work on homeownership was more pronounced for men than for women.

“Despite social norms changing, these findings suggest that many Australian couples still regard the male partner as the primary breadwinner. Given that women are likely to have lower wages and take employment breaks or work part-time after the birth of a child, heterosexual couples might see the man’s employment status and stability as more important when deciding whether to buy a home.”

In contrast, Dr Lass found the socio-economic background of a young person in temporary work had little effect on their likelihood of homeownership.

“Many people might assume that it doesn’t matter if a young person is working at a casual job; if their parents can afford to buy them a house, they will. The data shows that this is simply not the case.”

“An increased supply of affordable starter homes as well as policies that help temporary workers move into permanent jobs are essential if we’re trying to bring homeownership within reach for these young people. For those who still cannot buy, it’s important to strengthen renters’ rights and protections.”

Media enquiries: Ben Cardwell | +61 425 665 165 | fbe-media@unimelb.edu.au