While home ownership rates are dropping around the world, Australia is bucking this global trend.
A study by Swinton Insurance has revealed that the number of people owning their homes in Australia has increased in the last 10 years.
The figures may seem surprising, as house prices in Australia have been climbing for a few years.
And with our national property markets having bottomed out earlier this year, there now seems to be a fear of missing out among buyers once again, especially in Melbourne Sydney and Brisbane.
Swinton's research shows that the average monthly Australian salary is $4368.66 and the cost to buy one square metre of property is $6730.52, meaning you would need around 1.5 months' salary to purchase one square metre.
In comparison, the average cost of renting is $1889.35 - so one month's salary equals around 2.5 months' rent.
With renting more affordable, the drastic increase in ownership rate is even more remarkable.
Swinton wonder if this drive to own a home could be related to the size of Australian properties.
Data commissioned by CommSec in 2018 showed the average newly built Australian home (including both apartments and freestanding houses) was 186.3 sqm, 30 per cent larger than a new house built 30 years ago - making Australian homes the second largest in the world, behind the US.
In actual fact, home ownership is dropping on a global scale, with 22 out of 36 developed countries – or 61% – seeing a decline in the past 10 years.
How do we compare globally?
Here, we take a look at rental vs ownership trends around the world, and see how different countries compare…
For home ownership, a person’s salary heavily influences their decision when it comes to renting or buying.
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A key trend uncovered in the research shows most countries see a similar ratio of salary needed to the cost of price per square meter.
The most expensive country to buy property is the Czech Republic, where it costs three times the monthly salary of £872 to buy one square metre (£2,592). France is also costly, at 2.7x the monthly salary of £1,711 to buy a square metre (£4,651).
The cheapest country to buy a home, in relative terms, is the United States where the monthly salary is £2,525 and one square metre costs £1,791.
This indicates there are other factors besides salaries which contribute to lower home ownership in countries where salaries are higher, such as Switzerland, notoriously known for its soaring cost of living, where the average salary is £4,253 but the home ownership rate is 42.5%.
For those who rent a property, the data revealed one month’s salary is approximately twice the cost of a month’s rent.
People living in Greece and Switzerland have the best salary to rent ratio – with low rent costs in Greece (£345 per month) and high salaries in Switzerland.
Residents in Malta had the worst salary to rent figures – with an average salary of £1018, but monthly rent cost of £911.
Angela Bowden, Home Insurance Specialist at Swinton Home Insurance said:
“It’s interesting to see that home ownership rates have dropped in developed countries globally.
Our research shows that there are other factors at play other than just affordability – using the example of Switzerland, where salaries are so high, but the home ownership rate is very low – indicating that the cost of living and even personal preferences can dictate whether people become homeowners or not.”