Home ownership in sharp decline
Australia’s declining rates of home ownership are an indication that governments across the country have failed to address the issue of housing affordability.
The Household, Income and Labour Dynamics in Australia Report (HILDA), released this week, shows that entry-level properties are more expensive than ever and home ownership is dropping.
The report revealed that the number of owner occupied households dropped to 64.9% in 2014, from 68.8% in 2001.
Over the same time, the number of Australian adults who actually own their own home fell from 57% to 51.3%.
Home ownership among Gen Y – those aged between 25 and 34 – declined from 38.7% in 2002 to 29.2% in 2014.
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.
Markets set to split as house prices grow, unit prices lag
The Australian property market is set to diverge somewhat through the remainder of 2016, as house prices continue their upward trajectory while unit prices lag.
Figure from Domain Group’s June Quarter House price report show that house prices increased in the majority of capital cities over the three month period, while only three markets saw an improvement in unit prices.
“With the prospect of further interest rate cuts, it’s likely that house prices will continue rising in 2016, as improved affordability stimulates a surge in market confidence for both buyers and sellers,” Domain Group senior economist Andrew Wilson said.
“Unit price growth is also lagging behind houses, with record apartment building pushing supply ahead of buyer demand,” Dr Wilson said.