CommSec posted the below chart on Twitter (X) showing that Australia ranks 33 of 48 nations in home ownership, similar to the US, UK and Canada:
A joint study by AMP chief economist Shane Oliver and Bernard Salt showed that in 1966, 73% of Australians owned a home outright or with a mortgage. However, the nation’s home ownership rate has decreased to 63%:
The impact has been felt most harshly by younger Australians.
The 2023 Intergenerational Report showed that “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”:
The reduction in home ownership rates across Australia (and globally) has been driven by a substantial increase in home values relative to incomes, as illustrated by the next chart from Oliver and Salt:
On Tuesday, independent economist, Tarric Brooker, posted data from the National Housing Finance and Investment Corporation (NHFIC) illustrating how home ownership has become increasingly difficult across Australia:
Basically, housing has become so expensive that upper-middle income households are struggling to enter the market and are needing assistance via the federal government’s First Home Guarantee scheme.
This is a far cry from the pre-2000s era when homes could be purchased by families on a single income.
The true situation facing Australians is even worse.
First, Australians are increasingly being forced to live in high-rise apartments and granny flats, which were the fastest growing dwelling types (place of enumeration) in the 2021 Census:
As a result, the type and quality of housing for many home owners has worsened in comparison to previous generations.
Second, the proportion of Australians who own their property outright without a mortgage has fallen from 41% in 1996 to 31% in 2021:
Australia has fallen well behind the OECD average with respect to outright property ownership:
Finally, in the last decade, the median age of first-time home buyers in Australia has increased by ten years, from 24 in 2002 to 34 in 2022:
The federal government’s ‘Big Australia’ immigration policy will ensure that home ownership rates continue to fall in the future.
According to the 2023 IGR, Australia’s population will grow by 14 million people during the 40 years to 2062-63, due to historically high levels of net overseas migration:
This projected 14 million population rise is equivalent to adding a combined Sydney, Melbourne, Brisbane, and Adelaide to Australia’s population in only 40 years.
Few policies are more harmful to young Australians seeking a place to live than forcing them to compete for housing with hundreds of thousands of new migrants each year.
Future Australians will have to make do with cramped shoebox homes owned by corporations and landlords.
