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Home ownership rates over time

A while ago I came across some interesting graphs on Australian home ownership rates by Saul Eslake, Chief Economist at Merrill Lynch.

Despite all the cries of unaffordable housing the current home ownership rate around Australia is about 68%.

As you can see despite substantially lower interest rates since 1991 home ownership rates have fallen a little in almost every age bracket:

Home ownership rate

Home ownership rate 2

Clearly home ownership rates are falling, particularly in the younger age groups, but as I’ve mentioned in previous blogs many Gen Y’s are becoming renting investors – they buy an investment property or two before they buy their first home.

I remember years ago people predicting that the level of home ownership would drop significantly from around the 70% mark that Australian had been used to to much lower levels in line with other Western countries.

This just hasn’t happened…

But we are getting into home ownership a little later in life than before.

The high home ownership rate is one of the factors leading to the stability of Australia’s housing markets – remember half of these home owners own their homes outright (have no debt against them) and of the other 50% of home owners, half have minimal debt against them.



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Michael is a director of Metropole Property Strategists who create wealth for their clients through independent, unbiased property advice and advocacy. He's once again been voted Australia's leading property investment adviser and his opinions are regularly featured in the media. Visit Metropole.com.au


'Home ownership rates over time' have 2 comments

  1. Avatar for Property Update

    August 31, 2014 @ 7:45 am Peter M

    Remember 20 years ago or so being in outraged to believe that renting would provide me with a far greater lump sum at retirement at 60 than if I purchased a property as a home. I would have to invest equivalent $ over that period until 60. Are ther any facts or figures one way or the other?

    Reply

    • Avatar for Property Update

      August 31, 2014 @ 11:41 am Michael Yardney

      Peter
      There are so many individual variables involved that I’m not sure stats would help.
      What I can say is that owning a home without a mortgage is the biggest vehicle of wealth for the average Australian and while it clearly isn’t enough for financial freedom in your latter years, it’s better than having money in the bank that depreciates in value over time

      Reply


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