RBA tells first home buyers: forget about living in your own place
An RBA assistant governor has argued that participation in the housing market doesn’t need to be about purchasing to live.
Luci Ellis, RBA assistant governor of economics, made the comments in a speech to a group of housing researchers, the Sydney Morning Herald has reported.
“Many people rent. Someone else has to own those dwellings as well,” Ellis said.. “In Australia, most private rental properties are owned by other households.”
According to data from RBA reported by smh.com.au over the 13 years until 2015 60% of homeowners stayed at the same home compared to 75% of renters who moved with 18% of those moving more than five times.
“If we are concerned about inequality of housing outcomes, perhaps we should focus less on type of tenure, and more on security of tenure.”
Another comment made by Ellis in her talk was that first home buyers felt that they had to raise a 20% deposit which Ellis contended “isn’t actually true”. This belief in a need for a 20% deposit has led to a larger percentage of first home buyers to seek financial help from friends and family.
Ellis continued in her speech to say “it’s surprising that as housing prices have risen, the loan-to-valuation ratio hasn't shifted up over time. One reason might be that more borrowers are getting help from friends and family to accumulate the deposit. Careful analysis of data shows that the share of first home buyers receiving that help has been increasing over the decades, but actually remains low."
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