More than three-quarters of young adults dream of owning their own home
The young people of today have very similar goals and aspirations to the generations before them, yet they face major challenges when it comes to homeownership. The latest Real Estate Monitor from Credit Suisse looks at why young adults move out of the parental home later these days, and why their dream of homeownership is becoming difficult to achieve.
Young adults are moving out later and later
For young people, starting work and setting up their first home are part and parcel of the process of finding themselves and becoming independent – although it's happening later and later these days. Why is that?
The main reason that young people are moving out later is the longer period spent in education, with an increasing proportion of them opting to go on to study at college. The expansion of public transportation and increase in the number of university cities are also likely to be contributory factors. Shorter distances and improved transport connections enable many young adults to continue living in the parental home even when they are in tertiary education or start working. In addition, financial factors are often likely to contribute to the decision to remain in the parental home.
Sharing with a partner is the most popular household type
Once they have taken the decision to leave the parental home, most young adults head for the city. Whether in a shared home, a single-person household, or living with their partner, they often go on to live in a number of different household types at relatively short intervals. Living with a partner – with or without children – is the most popular residential model. Shared homes are likewise becoming increasingly important as a low-cost residential solution. And that applies not only during their studies: Living in a shared home is increasingly common among those in their mid-30s.
If we compare the needs of the young population with the supply of housing, the biggest gap probably lies in attractive, affordable housing for young professionals keen to have a place of their own in an urban area.
More than three-quarters of all young adults dream of owning their own home
More than three-quarters of all young adults dream of one day living in their own home, or even consider it a life goal. It's not initially top of their list, however. Young adults first of all want to retain flexibility, and that's easier to do with a rental apartment. Second, high affordability hurdles in terms of financing, coupled with rising prices, prevent the vast majority of younger households from accessing homeownership. Only from age 30 does homeownership become an increasingly important topic to people in Switzerland.
Summary: Dream of homeownership is increasingly out of reach for generations Y and Z
Homeownership is an increasingly common aspiration among young adults. However, it is becoming ever-more difficult to make this desire a reality: The fact that prices are already high and rising puts the dream out of reach for most. The change in the rate of homeownership shows that fewer and fewer people aged between 30 and 50 succeed in buying their own home. For generations Y and Z, this means homeownership will remain a pipe dream in many cases and even in later years will be increasingly rare.