Finance Property Home ownership in Australia on the slide, census data reveals

Home ownership in Australia on the slide, census data reveals

The Great Australian Dream is becoming a nightmare. Photo: Getty
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Australians are less likely to own their home outright than a decade ago, according to preliminary census 2016 figures, in the latest sign of declining home ownership in the “lucky country”.

Home dwellers were most likely to live in a property with a mortgage last year, whereas the greatest number of Australians lived in a fully paid-up home in 2006, the Australian Bureau of Statistics said on Tuesday in a preview of the census findings.

The ABS also revealed variations in home ownership across the country, with the typical home in New South Wales and Tasmania still owned outright.

The statistics agency did not announce specific home ownership figures, which are expected to be included with the release of the complete census results in June.

In the 2006 census, 32.6 per cent of occupied properties were owned outright, compared to 32.2 per cent that had a mortgage and 27.2 per cent that were rented.

The ABS data, which reinforces a well-established trend of dwindling home ownership amid soaring house prices, likely overstates the proportion of home owners as it focuses on properties rather than residents, for example including adult children who live with their parents.

The Household, Income and Labour Dynamics in Australia survey last year found the rate of ownership, including both mortgaged and paid-up properties, to have dropped from 57 per cent of adults in 2002 to 51.7 per cent in 2014, with the decline especially pronounced among those aged 18-35.

In a separate report released last week, banking giant HSBC ranked Australian millennials as having the second-lowest rate of home ownership among nine countries surveyed, at 26 per cent.

“Prices have risen faster than wages have in the last 20 years and that means that the gap between what ordinary people can afford to pay and what’s available in the market has grown,” Nicole Gurran, an urban planner and policy analyst at the University of Sydney, told The New Daily.

“It means the amount of money that people have to accumulate for a deposit has grown and that makes it more difficult for people to qualify for mortgages.”

Professor Gurran said the growing disparity between incomes and house prices was unlikely to be reversed for a generation.

“Housing markets are cyclical, prices rise and fall in line with economic cycles,” she said. “But what we’ve seen in Australia has been a structural shift.”

Roger Wilkins, a professor at the University of Melbourne, said that low interest rates, cuts to capital gains tax and poor infrastructure planning had all contributed to a lack of affordability.

“Fundamentally, what we are seeing is a shift in the composition of who owns the housing,” Professor Wilkins said. “So we are seeing a large rise in people owning second and third sold properties, obviously living in one of them and renting out the others that they own. The corollary of that … is that if there are more people owning more homes, there must be more people owning no homes.”

The situation was unlikely to ease in the foreseeable future, he said.

“In the absence of policy change, I suspect we’ll be likely to see a continued decline in home ownership.”

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