The 2023 Intergenerational Report (IGR) included the below chart showing how the rate of home ownership has fallen sharply for younger Australians:
“Home ownership rates have been falling for several decades for those of pre-retirement age”, the IGR notes.
“The decline in homeownership is most significant for younger age groups. Home ownership fell by 18 percentage points from 1981 to 2021 for those aged between 30 and 34, and 17 percentage points for those aged 25 to 29”
“A smaller decline in home ownership rates has occurred among those approaching retirement age – falling by nearly 3 percentage points between 1981 and 2021 for those aged between 60 and 64”.
According to a recent joint analysis by AMP Capital chief economist Shane Oliver and demographer Bernard Salt, in 1966, 73% of Australians owned a home outright or with a mortgage, but this figure has now decreased to 63%:
This reduction in home ownership has also been accompanied by a substantial rise in home prices compared to income:
The true situation is actually worse than presented above.
First, Australians are increasingly being crowded into high-rise apartments and granny flats, which were the fastest growing dwelling types (place of enumeration) in the 2021 Census:
Therefore, the type and quality of housing has deteriorated for many home owners relative to relative to prior generations.
Second, the share of Australians who own their home outright without a mortgage has decreased from 41% in 1996 to 31% in 2021:
Third, Australia has slipped well behind the OECD average in terms of outright property ownership, according to the OECD’s housing database:
Finally, the median age of first-time homebuyers in Australia has risen by more than ten years in the last decade, from 24 in 2002 to 34 in 2022:
The federal government’s ‘Big Australia’ immigration policy will lock in declining rates of home ownership into the future.
The 2023 IGR projects that Australia’s population will swell by 14.2 million people over the 40 years to 2062-63, driven by record high levels of net overseas migration:
This 14.2 million projected population increase is the equivalent of adding a combined Sydney, Melbourne, Brisbane and Adelaide to Australia’s current population in only 40 years.
Few policies harm young Australians looking for a place to live more than forcing them to compete for housing with hundreds of thousands of new migrants each year.
Future Australians face a crowded future renting high-rise shoebox apartments owned by the landlord class and corporations.
