A breakdown of house ownership demographics

How is Australia's housing ownership broken down in terms of tenure - in other words, who owns it, who lives in it and how do they live?

I collated data to answer this question and found some interesting results.

To start with, most homeowners are either couples or live alone as they are typically older Australians, which is not surprising.

Household type

Many who own their home outright live in a detached dwelling and most pay less than 25% of their gross household income towards housing costs.

They are also middle-aged, live in mostly detached houses and only 17% pay, on average, more than 30% of their gross pay on housing costs.

In contrast, Australian renters are more of a ‘mixed grill’ when it comes to household type, with private long-term tenants skewed towards a younger demographic than owners or mortgagees.

Housing type

More renters, these days, live in something attached rather than detached housing.

Over one-third of tenants reside in an apartment.

It is also worth noting that close to a third (31%) of renters pay more than a third of their wages at the cost of their abode.

And whilst this has been the case for the last five years the situation is likely to get worse as vacancy rates tighten due to the return of immigration and as new building starts tightening.

Rentals

Based on the data I collated, it shows that more tenants have been ‘renting’ from family and friends in recent years.

As rents rise many more renters will be forced to either boomerang back home, share with other tenants or accept much lower digs, assuming they are available.

Some of my contemporaries have been suggesting that one reason for the decline in the rental vacancy rate in recent years is because more renters are either living alone or in a couple situation.

They say that Covid drove this change.

But the latest housing occupancy survey shows that there has been no change in the average private rental occupancy rate of 2.6 per dwelling.

A lack of investment in new rental housing is the main driver for the decline in available rental space along with many investors deciding to keep their dwellings vacant.

Whilst some landlords have opted to list on the short-term rental market via Airbnb, most have opted for capital growth over a rental yield and in some locations, investors were put off by the state/territory government pro-renter Covid-related prescriptions and memorandums.

Public housing

Renters are really facing housing affordability issues.

One of Labor’s better policy suggestions is their “Help to Buy” scheme, which should help renters get into the housing market, with a 40% government down payment assisting buyers.

Ten thousand starts have been allocated in the first batch.

This is one way to lift the amount of available ‘public’ housing.

Outside of the mid-1980s renegotiation of the Commonwealth-State Housing Agreement (CSHA) by the Hawke government – which helped lift new housing starts by over 50% over the next two years – and the GFC-related emergency funding provided by the Rudd government, it shows that there has been a massive decline in the amount of public housing provided across Australia in recent years.

Building more public housing is one way to increase housing supply without adding fuel to dwelling prices and weekly rents.

Some are arguing as to if the 10,000 “Help to Buy” spaces will actually be taken up.

I hope that they are because based on the data, there is a need to at least repeat this volume of the new public-assisted builds on an annual basis.

Ideally, 10% of Australia’s new housing starts should be in the public space each year, which means about 15,000 ‘public’ new homes per annum.

About Michael Matusik Michael is director of independent property advisory Matusik Property Insights. He is independent, perceptive and to the point; has helped over 550 new residential developments come to fruition and writes his insightful Matusik Missive