Explanations of changes in housing tenure in Australia

Summary

More than any other factor, the trend in the home ownership rate among Australians aged less than 35 years relates to changes in relationship status and living arrangements. This analysis predicts falls in home ownership to be related to the proportion of people who never marry across their lifetime. On the other hand, as people have fewer children, and their savings capacity improves, home ownership rates may increase. Changing affordability across birth cohorts has not been a major determinant of rates of home ownership in Australia up to the year 2000.

Project Number: 10081
Research Theme: Housing Markets
Project Leader: McDonald, Peter
Funding Year: 2001
Research Centre: ANU

Description

Recent studies of changing housing tenure in Australia have indicated an apparent decline in rates of home ownership. Both economic and social reasons and their interactions are proposed as explanations for these trends. The interaction of the social and the economic is best encapsulated in the notion that the new market economy and the demise of the male breadwinner model of the family have combined to create a new risk-oriented society where individuals become motivated to invest in themselves - the lived experience of the risk economy may make low-income people much more risk averse and, hence, reluctant to involve themselves in the risks of home ownership. However, there exists a need to confirm whether, in fact, rates of home ownership are falling and whether they are likely to continue.

Additionally, a comprehensive analysis of factors affecting tenure changes is required to inform the development of housing and housing-related policy. For example, previous studies have neglected to consider one or more important issues such as the impact of relationship breakdown on housing tenure; changes in home ownership at the older end of the age spectrum; and the role of immigration on housing tenure changes. In particular, more research is required on the relationship between life course events and home ownership-research that is more longitudinal in nature as opposed to the cross-sectional analysis that has characterised work in the past.

The central aim of this project is to document and explain trends in home ownership across time, especially in the 1990s with a view to the implications for the future. Methods to be used for this project include standard bivariate, multivariate and trend analysis using a combination of Census and large-scale surveys. There will be an emphasis on the dynamics of people's life courses, rather than purely upon cross-sectional comparisons, and the resulting report will provide a comprehensive analysis of the combination of social and economic factors associated with changes in housing tenure. Attention in this proposed study will concentrate upon changes in the period from 1990.  

The proposed project has considerable policy relevance. Research has shown that home ownership affords substantial economic advantages that are not available to renters and it has been suggested that the achievement of home ownership may assist in redistributing patterns of inequality that result from the labour market. Declining rates of home ownership, particularly among low- and middle-income earners, will have obvious implications for the financial security of a growing proportion of Australians, for government policy in addressing the potential increase in inequality of wealth, and for the adequate supply of appropriate and affordable rental housing. The project brings together key Australian social policy researchers, representing expertise in a diverse array of relevant fields-demography and family dynamics; housing; income and wealth distribution; poverty; ageing; mobility; and international migration-as well as high-level technical expertise in social and economic research methods.

More Information

Research and Policy Bulletin: Issue 052: Why is the rate of home ownership falling in Australia?
147 KB PDF Document

Positioning Paper: No. 044: Changing home ownership rates in Australia: issues of measurement and interpretation
699 KB PDF Document

Final Report: No. 056: Trends in home ownership rates in Australia: the relative importance of affordability trends and changes in population composition
3.06 MB PDF Document

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