Australia has hit a T-intersection on housing affordability. One way is the haves, the other will be the have-nots. Parents now have a choice to make. Do you want your kids to have a private school education or do you want them to own a home?
I'm not trying to make a comment about private versus public education. What I am saying is the choice to send your child to a private school comes at a cost. A private school education ranks only second to a house purchase as the most expensive thing that you may buy. It means most parents will not be able to give a helping hand to buy a home.
It's a shocking choice to have to make but the reality is that rising home prices are continuing to change our way of life. Not so long ago many parents believed a private education would lead to higher earnings and set their kids onto a path of financial independence. This is no longer the case.
Even with the best education, the prospect of home ownership will be out of reach unless there is financial support from a parent.
Financially speaking, a University graduate, (regardless of the school they went to) earning the average of $65,000 pa cannot afford to pay off their HECS debt, save for a 20 percent home deposit and enjoy a reasonable quality of life while doing so.
Real estate prices are rising faster than wages, the median house price in Sydney is now $1,178,417, and for an apartment it is $757,991, which means the Australian dream is currently out of reach for many first-home buyers without family support.
When Prime Minister Turnbull said last year that parents should "shell out" to help buy their kids a home, he admitted that the only way to get a start on the property ladder is to get a helping hand. This may be very unpalatable for parents who in many cases need to save for their retirement and must fill super gaps left by child-rearing responsibilities.
The PM's comment also demonstrates that Federal, State and Local Governments don't have a coordinated policy on housing affordability and are relying on families to weather the financial storm ahead in young peoples' lives.
Helping your kids to buy a home is a choice parents now have to make. Once the decision to fund a private school or university education was the biggest financial decision many parents made for their kids. But the reality is, even with the best education, the prospect of home ownership will be out of reach unless there is financial support from a parent.
Giving up those private school fees is likely to help get your child a deposit. Private Primary school fees, $18,000 over seven years, equates to $126,000 over that period. If you trade off a Private High School education for your child, you can save even more. Private High School Fees, say $25,000 over six years equates to $150,000. The total here is $276,000 without accumulated interest. This is the 20 percent deposit on the median priced house in Sydney.
Add the savings for not paying for a university degree, $18,000 for nursing, $29,000 for business or $49,000 for medicine, and parents may be able to help their kids even more with a home deposit.
We've got a housing-affordability policy vacuum in Australia. We need to make housing affordable for all families -- regardless of where their kids go to school.
Our politicians are living on borrowed time if they think they can continue to ignore the consequences of the modern Australia they are helping to create. They are creating a society of 'haves' and 'have-nots', creating a less equal society by refusing to take coordinated action on housing affordability.
We all want the best for our kids. I call on Federal, State and Local politicians to really look at the future victims of this crisis and what the impacts upon Australian society will be. Very few people go onto be financially independent without owning their own home. It's time to work together and prioritise housing affordability as a national economic priority. We're calling for change on behalf of all parents.