Lost dream of homeownership
The falling rate of homeownership among young adults is a phenomenon that is worrying politicians throughout the EU. It has created an absolute difference between older and younger generations. It does not bode well for the well-being of society. A paper commissioned by the Housing Authority and researched by economists Marie Briguglio and Glen Spiteri reveals interesting information about some of the effects on younger people losing their dream of homeownership. It argues that young Maltese people leave home considerably late compared to other EU countries, primarily due to a lack of affordability. There are other more crucial risks if this trend continues. Shutting young people out of the housing market may distort their marriage and childbearing decisions. An ECB research paper published earlier this year quotes expert opinion: “Homeownership rates relate directly to the strength of local communities, social capital and political engagement.” Some of the causes behind the declining affordability of homeownership for younger people are well known. The ECB argues that changes in earnings explain more than half of the decrease in the homeownership rate. Career-long positions...