Millennials – or Generation Rent – have become the poster children for a housing affordability crisis characterised by falling rates of home ownership and a growing reliance on the ‘bank of mum and dad’.
The plight of would-be first-home buyers is topical, and on Saturday the claim that “last year more Australians bought their seventh home than those who bought their first” began garnering attention online.
But is the claim accurate?
The claim appeared in an ABC article on Queensland’s rental laws.
“State Housing Minister Mick de Brenni said that last year more Australians bought their seventh home than those who bought their first”, the ABC wrote.
The claim quickly went viral across social media.
It’s got to stop. People invest in housing because the financial benefits provided by all tax payers is a great boon to them. It also artificially pushes up housing prices past the reach of people who just want a roof over their head. Investors, go back to the stock market.
— Andrew Paterson (@APadeau) December 9, 2018
The New Daily contacted Mr de Brenni’s office for clarification.
“The statistics referenced in that quote were misinterpreted from a Misha Zelinski article for the Huffington Post,” a spokesperson for the minister told The New Daily.
“The quote has now been removed from the relevant ministerial media statement, and we have contacted the ABC to get it removed from their article.”
So, the claim misinterprets figures from a Huffington Post article titled, How Property Addicts Have Locked Young Australians Out Of The Housing Market.
“Our government does less to help a family buy its first home than it does for an investor who wants a fifth, sixth or seventh,” wrote author Mr Zelinski, who is assistant national secretary of the Australian Workers’ Union.
“The truth for young people currently entering the workforce is they might never buy a home. Today in Sydney, you need to earn over 12 times your annual income to buy an average house. Historically you only needed three times your salary.”
Now, let’s take a closer look at the facts about first-home buyers, investors, renters, and rates of home ownership in Australia.
First-home buyers v non-first-home buyers
The Australian Bureau of Statistics releases monthly Housing Finance figures that break down the number and types of owner-occupier buyers approved for home loans.
The figures show that 104,068 first home buyers were approved for home loans in 2017 compared to 558,503 non-first-home buyers. The data also shows that the number of first-home buyer commitments actually rose last year, and hit a five-year monthly high in November 2017 when first-home buyers accounted for 18 per cent of the market.
The surge was largely driven by stamp duty concessions rolled out by NSW and Victorian state governments in July 2017, with the enthusiasm already waning by the beginning of 2018.
“Between July 2017 and November 2017, first-home buyer commitments as a percentage of total owner-occupied housing finance commitments recorded strong growth,” the ABS said.
“The increase was driven mainly by changes to first-home buyer incentive programs in New South Wales and Victoria.”
How many Australians own rental properties?
The most recently available ATO data shows that around 2.1 million Australians owned rental properties in 2015-16.
Of those investors, around 1.5 million owned one rental home, 396,037 owned two, 122,696 owned three, 45,328 owned four, and 18,880 owned five.
And 20,023 investors owned six or more rental homes, according to the ATO.
Home ownership in Australia is falling
Studies show that the Australian dream of home ownership is “increasingly out of reach” for many.
Nearly a third of Australians now rent – 31.3 per cent of the population in 2016, up from 28 per cent in 2001.
According to the ABS, home owners represented 70.6 per cent of all households in 1999-2000, a figure that fell to 67.2 per cent of all households in 2013-14.
Home-ownership rates are falling most dramatically among the young and the poor, a study by independent think-tank the Grattan Institute found.
“Younger Australians have always had lower incomes and less accumulated savings, and hence lower home-ownership rates,” Grattan Institute fellow Brendan Coates said.
“But between 1981 and 2016, home-ownership rates among 25-to-34-year-olds fell from more than 60 per cent to 45 per cent.”
At the same time, home ownership also fell for middle-aged households.
“For 35-to-44-year-olds, home ownership has fallen fast – from 74 per cent in 1991 to around 62 per cent today – and home ownership is also declining for 45-to-54-year-olds,” Mr Coates said.
This suggests that falling home ownership is due to higher dwelling prices rather than changing preferences for home ownership among the young, he said.
And there could be be “big consequences” should the trend continue.
“Whereas 30 years ago Australians of all income levels had a good chance of owning their home, now only wealthier younger Australians can expect to do so,” Mr Coates said.
“We estimate that just over half of retirees will own their own homes in 40 years’ time.”
The claim is false.