Home ownership

Home ownership is the most common and most desired form of housing in Australia. According to the 2006 ABS Census, between 69 and 71 per cent of Australian households are owner occupiers. The number of households who own their home outright has fallen since 1995 from 42 per cent to 34 per cent, whilst the number of households who owned their home with a mortgage has increased from 30 per cent to 35 per cent (ABS 2007 4).

AHURI researchers have examined a range of topics including home ownership aspirations for Indigenous and non-Indigenous Australians, the barriers, challenges and opportunities of home ownership, and policy interventions to support home ownership.

  • Are home ownership rates falling in Australia and why?

    • Several AHURI research projects have tracked changes in home ownership patterns over time in Australia to gauge whether rates of ownership are falling due to decreasing housing affordability — Project 80087, Project 80088 & Project 80151.
    • Amongst younger households there appears to be a delay in attaining home ownership due to lifestyle factors. However, the evidence suggests these groups will achieve home ownership at approximately the same rate later in life as previous generations. Home ownership rates can also potentially be forced down by factors such as divorce rates not being matched by rates of re-partnering — Project 10081 & Project 20017.
    • Despite declining home ownership rates, home ownership remains an aspiration for both Indigenous and non-Indigenous Australians — Project 10016.
      Recent qualitative research indicates that for some Indigenous Australians the positive social attributes of home ownership are more important than the potential economic benefits. Intergenerational asset building and housing security are the primary motivators driving these aspirations — Project 20501.
    • Affordability is a major barrier to home ownership. However, AHURI research indicates that job security rather than income may be a greater determinant of home ownership — Project 40010. This is because people in less secure employment buy cheaper homes however those on higher incomes do not necessarily buy more expensive homes.
    • AHURI research also indicates that mortgage default is rising. Those who take out low-documentation loans (loans where limited evidence of the borrower’s capacity to meet loan repayments is required) experience the greatest risk of mortgage default — Project 30529.

  • What are the economic benefits of home ownership?

    • The wealth opportunities of home ownership are not well understood in Australia, particularly for low-income households — Project 50514. However, recent AHURI work finds that on average, every $100 000 increase in housing wealth results in an increase in consumption of $1000 to $1500 per annum because increased housing wealth helps to relax borrowing constraints on home owners. This facilitates increased consumption — Project 60360.
    • Home owners receive significantly more public assistance in Australia than public and private renters. In an examination of indirect assistance alone (tax concessions), AHURI research estimates that owner-occupiers receive $45 billion per year of indirect assistance. In comparison, renters receive $2.8 billion of indirect assistance (2005–06 money) — Project 60098.

  • How can home ownership for low-income households be facilitated?

    • Research examining home ownership support schemes, such as shared equity initiatives, finds they need to be well-targeted, and they need to account for differences between local markets in order to avoid the artificial inflation of house prices and achieve affordability goals — Project 70394.
    • Australian home ownership assistance programs have been largely successful at assisting those ineligible for bank finance in their own right however the key to these successes has been a stable or rising property market — Project 80087. Stagnant or declining property values are linked to higher foreclosures, thus poor location is a risk factor for low-income home ownership — Project 80087.
    • Home ownership initiatives need to be complemented with interventions to increase the supply of affordable housing due to the overall scarcity at the low-end of the housing market.

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