Home ownership is the most common and most desired form of housing in Australia. The 2011 ABS Census recorded that 67 per cent of Australian households are owner occupiers. The number of households who own their home outright has fallen since 1996 (Census of Population and Housing 2015.0 1996) from 40.9 per cent to 32.1 per cent, while the number of households who own their home with a mortgage has increased from 25.5 per cent to 34.9 per cent (ABS 2011 Census QuickStats).
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 buying a home due to lifestyle factors. However, the evidence suggests when these households become older they will have home ownership rates that are approximately the same as previous generations. Home ownership rates can also be reduced by factors such as divorce rates being greater than rates of re-partnering — Project 10081 & Project 20017.
- Home ownership remains an aspiration for both Indigenous and non-Indigenous Australians. Fifty-four per cent of people who were not living in owner-occupied housing said that buying a home was either very important or important to them in the short term — Project 10016.
- Qualitative research indicates that for some Indigenous Australians the positive social attributes of home ownership, such as being able to pass the house down in the family, are more important than the potential short-term financial benefits. Intergenerational asset building for future generations 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 factor in home ownership. This is because people in less secure employment buy cheaper homes; however, those on higher incomes do not necessarily buy more expensive homes — Project 40010.
- AHURI research also indicates that the number of mortgagors who have had their homes repossessed has risen significantly in NSW and Victoria since the mid-1990s. Those who take out low-documentation loans (where there is limited evidence of borrower's capacity to meet loan repayments) 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. This increased housing wealth lets home owners borrow more, increasing consumption — Project 60360.
- Home owners receive significantly more public assistance in Australia than public and private renters. AHURI research examining indirect assistance alone (tax concessions) estimated 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 take into account differences between local markets in order to achieve affordability goals and avoid artificially inflating house prices — Project 70394.
- Australian home ownership assistance programs have been largely successful assisting those ineligible for bank finance to buy a house; however, the key to these successes has been a stable or rising property market. Stagnant or declining property values are linked to higher foreclosures, consequently poor location is a risk factor for low income home ownership — Project 80087.
- Due to the scarcity of low cost housing, home ownership initiatives need to be complemented with interventions that increase the supply of affordable housing.