· Part 1: What happened?
· Part 2: Working towards what, exactly?
· Part 3: Home ownership? Tell ‘em they’re dreaming’
· Part 4: Just how golden are the golden years

A patch of earth to call one’s own lies at the heart of the great Australian dream. But if you believe the headlines, it has come under threat in recent years as property prices climbed beyond the reach of many. Will the first decades of the 21st century be remembered as the dream killers?

It depends who you ask.

Harley Dale is one of the optimists. As the chief economist at the Housing Industry Association he travels extensively in Australia, speaking to people about building, buying and living in houses. In his view it’s too early to draw the curtain on an idea so deeply embedded in the culture.

“Even a few generations on from the end of the second world war you still have this almost intangible cultural affiliation in Australia with home ownership, even if, in the minds of some people, it’s more difficult to achieve than it used to be,” he told The New Daily.

“I don’t think all of a sudden you break that and all of a sudden come up with a situation like Germany, where everyone is happy to rent.”

But he acknowledges there are many people for whom owning a home feels unattainable. While finances lock some people out of the property market, he blames the “defeatist” attitude he sees in others on inaccurate storytelling about our recent past.

The period from 1999 to the global financial crisis of 2008 saw Australian house prices soar. While home owners were rubbing their hands together, people on low to middle incomes watched the dream of home ownership disappear in a flurry of bids outside a house they had dared to hope could be theirs.

Mr Dale says those boom times still colour the way we see things now, and he suggests taking a longer view. House prices were flat through the 1990s, while during the GFC they dipped before tracking sideways over the last three years. Looking at housing affordability in the years ahead, he says the clouds may eventually clear for aspirational home buyers.

Looking back further than 1999 also helps with perspective. The Australian Bureau of Statistics illuminates another aspect of the story – how many of us own our homes? Did it fall as un-affordability rose?

Data shows that over the last 40 years the rate of home ownership in Australia has moved in a tight range. In 1971, 68.8 per cent of the population owned in their home. By 1995 it had risen to 71.4 per cent, but it has been easing since then. By 2006 it had slipped to 69.8 per cent and in 2012 it was down to 67.4 per cent.

Should we be worried? Harley Dale remains positive.

“I think it is possible with some brave reforms around taxation and regulatory reform that you could have a situation where we retain historically high home ownership rates, and that includes for younger generations,” he says encouragingly.

Buying a house remains a challenge for many. Will that change in years ahead? Photo:Shutterstock

‘Great Australian void’

Not everyone agrees. Sociologist Dr Felicity Picken from the University of Tasmania suspects the great Australian dream is on shaky ground. In fact, she refers to it as the “great Australian void”. We’re a nation in transition, she says, so where is the vision about what we’re transitioning to?

Are we becoming like Europe, where renting predominates? If so, why are tenants offered such short term leases? We rent while we are young and mobile, but are we still graduating into home ownership? Worse, is the materialism at the heart of the great Australian dream the very thing that’s preventing us from buying a home of our own?

Ultimately, Dr Picken says it’s the growing number of families stuck in the middle who will be the losers – too well-off for public housing, not wealthy enough for a mortgage. Australia holds onto the notion that renters are bohemian layabouts who move around and don’t need security of tenure. But increasingly, renters are families or workers with schools and jobs to worry about.

“So the great Australian dream is preventing us from seeing the realities [of housing] and particularly the realities which will come out over the next 10 to 20 years, where people will be stuck in rentals for ever.” And that, she says, has disabled an appropriate policy response.

Then there’s the question of expectations. You hear it a lot: ‘Young people just want to walk straight into a palace in the city’s hippest suburb’. Dr Picken admits it’s a factor, but it’s not the main reason that more people are getting trapped in the rental market. Look at it long enough and it comes back to affordability.

“Our grandparents were prepared to scrimp and save and go without to obtain that security. We want to have the trips around the world, the nice car and the house, and everything. But we’re not prepared to take on that austerity,” she says.

“But there’s also a sense in which home ownership is becoming increasingly unachievable for some people. It’s not even on their radar. For many people, needing $100,000 for a deposit means that home ownership is never going to be a reality.”

The golden years

At the end of it all, the great Australian dream is fully realised when we clock-off from a 40-year shift at work and head off into the sunset – maybe a caravan in tow – with a comfortable retirement awaiting our enjoyment.

But with job security threatened by a changing economy, and a family home possibly no longer available to cash-in, are expectations of a secure retirement also at risk? Again, it depends who you speak to. If you ask Professor David Service of the Australian National University, it’s looking good. Like Harley Dale, he’s an optimist.

In the decades after World War II, about the time the great Australian dream was first registering on the national consciousness, the majority of workers had no retirement savings. None at all.

“Their view of retirement was that, ‘We would exist on the age pension and we would own our house and the world would be ok’,” says Professor Service.

“What’s happened since then in terms of retirement savings is that it’s a whole new world and which is an awful lot better than the previous one … There is still an awful lot of people who will [own a home at retirement],” he says, “but as the percentage of non-home owners grows, so the percentage of people with significant retirement savings also grows.”

Professor Service also warned against reading too much into forecasts about how much we need to retire comfortably. Research quoted in this article suggested a couple would need $57,000 a year to retire comfortably. 

“If you’re on average weekly earnings you’re not on that much money now. The issue is not how much in dollars you need. It’s what proportion of your current after-tax earnings you need to maintain your current lifestyle in retirement. If you pose the question differently, you get a different answer.

“There are lot of people existing on less than average weekly earnings. You may wonder how they survive. The point is, they do.”

On the likely complexion of retirement in the new century, he says we should consider examples from other societies around the world.

“There are many examples of cultures where children essentially look after their parents once the parents finish working. These days people say the kids aren’t moving out until much later. One response is to say, ‘That’s all-right, but I’m staying with you when I can’t work any more’.”

“That’s one possible outcome that would make a lot of financial sense.” Even if it’s a hard sell for the other participants.