Home ownership and housing tenure : The facts straight from the source

In recent times, there has been much public debate about the rate of home ownership and housing affordability.

So what’s really going on? How many of us own our own home and how many are renting?

Housing Affordability Buy Property

And how are these trends changing?

The Australian Institute of Health and Welfare answered these questions plus more by analysing the latest Census data.

According to the 2016 Census of Population and Housing (Census), there were nearly 8.3 million households in Australia.

Where household tenure was known:

  • 67% (5.4 million households) were home owners:
    • 32% (2.6 million households) without a mortgage
    • 35% (2.9 million households) with a mortgage
  • 32% (2.6 million households) were renters; where landlord type was known:
    • 26% (2.1 million households) were renting from private landlords
    • 3.7% (300,000 households) from state or territory housing authorities
    • 1.3% (105,500 households) from other landlords
  • 1.0% (79,000 households) were other tenure, including households which are not an owner with or without a mortgage, or a renter (ABS 2017c).

While Census data provides the most comprehensive view of housing tenure among Australian households, it is limited to once every 5 years.

Other survey data can be used to monitor changes in housing circumstances during non-Census periods.

Survey of Income and Housing data shows that in the past 20 years to 2017–18, there has been a decline in the proportion of households owning their home without a mortgage, and increases in households with a mortgage and in private rental agreements (Figure 1).

Tenure Tipe

Trends in home ownership

Home ownership data from the 2016 Census show a home ownership rate of 67%, down slightly from 68% in 2011.

While the home ownership rate remained around 67–70% from the mid-1960s, the rate for different age groups has varied markedly over this time.

The rates among different age groups can be determined using the age of the Census household reference person.

Specifically, the number of private dwellings by age of household reference person and tenure type can be used to calculate the proportion of homeowners of specific age groups from total households (excluding not stated).

The home ownership rate of 30–34 year olds was 64% in 1971, decreasing 14 percentage points to 50% in 2016, according to Census data.

For Australians aged 25–29, the decrease was similar—50% in 1971, decreasing to 37% in 2016.

Home ownership rates have also decreased among people nearing retirement.

Since 1996, home ownership rates have gradually declined; rates for the 50–54 age group have seen a 6.6 percentage point fall over these 20 years (80% to 74%) (AIHW 2019).

To further illustrate these changes in home ownership rates, Census data can be presented by birth cohorts (Figure 2).

The rate has fallen for each successive birth cohort since 1947–1951.

Home ownership rates of Australians born during 1947–1951 increased from 54% in 1976 (when they were aged 25–29) to 82% 40 years later in 2016 (when they were aged 65–69).

By contrast, the home ownership rate of those born during 1987–1991 was 37% in 2016 (when they were aged 25–29), 17 percentage points lower than the 1947–1951 cohort at the same age.

Ownership Rate

Financial support for home buyers

Governments provide financial support to assist people to buy a house.

The four main types of support available to home buyers are home purchase assistance, First Home Owner Grant scheme, First Home Super Saver Scheme and First Home Loan Deposit Scheme.

Mortage Lending2Home purchase assistance includes a range of financial assistance, such as direct lending, concessional loans and mortgage relief, to eligible low-income households to improve their access to, and to maintain, home ownership.

Households may receive more than one type of home purchase assistance (AIHW 2018).

First Home Owner Grant scheme, introduced nationally 1 July 2000, is funded by the state and territory governments and administered under their legislation.

A one–off grant is payable to low–income first homeowners who apply and satisfy eligibility criteria.

Examples are that at least one applicant must be a permanent resident or Australian citizen, each applicant must be at least 18 years of age, and temporary residents do not qualify to receive the grant (AIHW 2018).

First Home Super Saver Scheme, introduced by the Australian Government in the 2017–18 Federal Budget, supports first home buyers who meet the eligibility criteria to save money for a house deposit using their superannuation fund.

They can voluntarily contribute up to $15,000 in any one financial year, and $30,000 in total under the scheme.

LoanThey receive the tax benefit of saving through their superannuation contribution arrangements (ATO 2019; Australian Treasury 2017).

The First Home Loan Deposit Scheme is an Australian Government initiative which has been designed to help first home buyers get into the property market sooner.

Under the Scheme, eligible first home buyers can purchase a home with a deposit with as little as 5 per cent without the need to take out lenders mortgage insurance (NHFIC 2020).

In 2018–19, around 43,000 instances of home purchase assistance were provided across Australia. Of these:

  • half (50%) of the main applicants receiving assistance were aged 25–44
  • one-quarter (24%) of recipients earned a gross income of less than $700 per week ($36,400 per annum)
  • 72% (or 31,000) of households receiving home purchase assistance were in Major cities, 13% (5,700) in Outer regional areas and 12% (5,000) in Inner regional areas. Only a small proportion were in Remote (2% or 1,000) or Very remote (less than 1% or 200) areas (AIHW 2020).

The number of dwellings purchased by owner occupier first time home buyers—those likely to access First Home Owner Grant payments—decreased, from around 137,700 dwellings in the 12 months to May 2010 to 110,500 in the 12 months to May 2020.

This decrease is further reflected in a fall in the proportion of all dwellings financed by owner occupier first home buyers—32% in May 2010 and 28% in May 2020 (ABS 2020a).

Trends in the private rental market

The proportion of households renting from private landlords has had a disproportionate impact on younger households over recent years, with a sharper increase in the proportion of young Australians renting than older Australians (Figure 3).

Private Rental Market

What factors are influencing these changes over time?

Changing household demographics and population increases have influenced home ownership trends and a move from home ownership to renting privately.

They have also influenced changes to the dwelling type need of households (ABS 2017d; COAG 2018; Yates 2015).

Family and household composition

Lending Interest CreditFamily composition and marital status are related to housing tenure (Baxter & McDonald 2005; Stone et al. 2013).

Over recent decades, the average household size has decreased and the number of single-people and single-parent households has increased, tending to have lower home ownership rates than other household types (Yates 2015).

In 2016, for example, 16% of single-parent households with dependent children rented privately, an increase from 6.3% in 1981.

Population growth

Population increases in Australia are driving demand for housing, other services and infrastructure (COAG 2018).

Most (84%) of the population increase in 2018–19 occurred in Brisbane, Melbourne and Sydney (ABS 2020).

Population Demograpghy ResearchOverseas migration has contributed to increased housing demand (Daley et al. 2018).

Most immigrants move to major cities, leading to an increase in demand for housing in these areas.

International students have also had an impact on the private rental market, predominantly in major cities (Parkinson et al. 2018).

The subsequent pressure on housing stocks in these areas highlights the need for coordinated and well considered urban planning strategies.

Changes in dwelling types

The types of dwellings Australians live in has changed over time.

The proportion of households occupying separate houses has decreased in the past 20 years, from 76% of all households in 1996 to 73% in 2016, offset by increases in semi-detached and townhouse households.

In 2016, around 13% of households lived in semi–detached row or terrace and townhouses, up from 8% in 1996.

A total of 13% lived in flats or apartments in both 1996 and 2016 (ABS 2001, 2017a).

Source: Australian Institute of Health and Welfare

Now is the time to take action and set yourself for the opportunities that will present themselves as the market moves on

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Michael is a director of Metropole Property Strategists who help their clients grow, protect and pass on their wealth through independent, unbiased property advice and advocacy. He's once again been voted Australia's leading property investment adviser and one of Australia's 50 most influential Thought Leaders. His opinions are regularly featured in the media. Visit Metropole.com.au


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