Home ownership rate could fall below 50%
The high cost of real estate could see more than half of Australians priced out of the housing market within the coming years.
The Melbourne Institute’s Household Income and Labour Dynamics in Australia (HILDA) Report has found home ownership rates in Australia are deteriorating as house prices rise. The report found younger Australians were the group most impacted by the fall in home ownership.
“The decline in home ownership between 2001 and 2014 would suggest there is likely to have been change in the age composition of home owners. In particular, one might expect that rates of home ownership have fallen more rapidly for younger age groups,” the report said.
According to the report, home ownership among the 25-34 age group fell from 38.7% in 2002 to 29.2% in 2014, with much of the decline occurring from 2010 to 2014.
Home ownership among persons aged 25–34 declined from 38.7% in 2002 to 29.2% in 2014, with much of the decline occurring between 2010 and 2014.
While other age groups did see falls in home ownership rates, they were not as pronounced as the decline for 25- 34-year-olds, the report said.
“Among persons aged 35–44, home ownership declined from 63.2% to 52.4%, and among persons aged 45–54, it declined from 75.6% to 67.4%. There was also a slight decline in home ownership among persons aged 55–64, from 75.1% in 2002 to 72.9% in 2014. There was essentially no change in home ownership among those aged 65 and over.”
The report’s author, Professor Roger Wilkins, said the trend was likely to see Australia’s home ownership rate fall below 50%.
“Between 2001 and 2014, owner occupied houses have declined by 3.5 percentage points. That translates to 700,000 Australian homes,” said Professor Wilkins. “It is likely that in the next few years less than half of adults will be home-owners,” Wilkins said.