Research Paper no. 21 2008–09
Home ownership in Australia data and trends
Tony Kryger
Statistics Section
11 February 2009
Contents
Executive Summary
- Around 70 per cent of Australian households own or are
purchasing their home. The rate of home ownership has remained
remarkably stable at this level for over four decades according to
data collected by the Australian Bureau of Statistics in its Census
of Population and Housing and its Survey of Income and Housing
(SIH).
- The proportion of Australian households who own their home
outright (that is, without a mortgage) has been far from stable.
Based on data from the Census, the rate of outright home ownership
fell from 45 per cent in 1947 to 32 per cent in 1976, rising to 43
per cent in 1996 before falling again to 35 per cent in 2006. Data
from the SIH for the period 1995–96 to 2005–06 show a
similar marked fall in the rate of outright home ownership, falling
from 43 to 34 per cent.
- One of the main demographic influences on home ownership is
age. Rates of home ownership increase progressively with age,
reflecting the different life cycle stages. The relationship
between age and home ownership has meant that Australia’s
ageing population has put upward pressure on the home ownership
rate.
- Another demographic influence on home ownership is household
composition. Rates of home ownership above the average for all
households have been experienced by couple families while rates
below the average have been experienced by one parent families and
lone person households. Changes in the composition of Australian
households from couple families to other family types have
therefore acted to put downward pressure on the home ownership
rate.
- In addition to demographic influences, the rate of home
ownership in Australia has been influenced by a variety of other
factors including housing affordability, the number of income
earners in a household, and the availability of alternative
investment opportunities (to housing) such as superannuation and
shares.
- Given the wide variety of factors that influence home
ownership, their net effect has been, surprisingly, to leave
Australia’s home ownership rate largely unchanged for more
than 40 years.
|
Introduction
The purpose of this paper is to examine whether any changes have
occurred in Australia s rate of home ownership, defined as the
proportion of households who own or are purchasing their homes. Two
main data sources are considered the Census of Population and
Housing and the Survey of Income and Housing (SIH) both the
responsibility of the Australian Bureau of Statistics (ABS). The
paper also looks at home ownership from the perspective of age and
household composition and discusses how changes in population
composition have affected the rate of home ownership.
The data
Care has to be taken when comparing data from the Census with
data from the SIH due to the different methodologies used.
Importantly, the SIH collects information from a sample of
households and as such is subject to sampling variability. The
estimates obtained from the SIH may, therefore, differ from the
results that would have been obtained if information had been
collected from all households. The Census, on the other hand, aims
to enumerate the entire population.
Another important difference to consider is that SIH information
is obtained from the occupants of dwellings by specially trained
interviewers, whereas Census information is obtained from forms
completed by each household, often by one household member. This
dependence on self-enumeration rather than interview in the Census
means that respondents interpretation and completion of questions
may be less accurate.[1]
While differences between the two data sources are important, it
should be noted that for those years when data are available from
both sources, the home ownership rate is very similar, differing by
less than two percentage points.
The longest time series on households by tenure type is that
provided by the Census. Table 1 has data back to 1947 and its most
striking feature is the stability of the home ownership rate over
more than four decades. From a low of 53 per cent in 1947, the home
ownership rate climbed to 63 per cent in 1954 and then to 70 per
cent in 1961. In subsequent Census years the home ownership rate
remained at or around 70 per cent. Indeed, small fluctuations in
the home ownership rate from Census to Census may, in part, be
explained by methodological differences between Censuses.[2]
Table 1. Households(a) by tenure type –
ABS Census data(b)
|
Owner
households |
|
| Year |
Owner
without a
mortgage
|
Owner
with a
mortgage
|
Total
|
Renter
|
Other
tenure
type
|
Total(c)
|
|
|
| 1947 |
838
|
148
|
986
|
813
|
49
|
1847
|
| 1954 |
1122
|
353
|
1475
|
799
|
56
|
2330
|
| 1961 |
1322
|
624
|
1946
|
763
|
60
|
2768
|
| 1966(d) |
na
|
na
|
2232
|
835
|
60
|
3127
|
| 1971(d) |
na
|
na
|
2469
|
1001
|
119
|
3589
|
| 1976(e) |
1306
|
1438
|
(f)2762
|
1045
|
232
|
4039
|
| 1981 |
1549
|
1543
|
(f)3179
|
1164
|
191
|
4534
|
| 1986 |
1982
|
1604
|
3586
|
1334
|
174
|
5095
|
| 1991(g) |
2362
|
1561
|
3923
|
1561
|
210
|
5694
|
| 1996 |
2658
|
(h)1656
|
4314
|
1866
|
68
|
6248
|
| 2001 |
2811
|
(h)1872
|
4683
|
1953
|
101
|
6737
|
| 2006 |
2478
|
(h)2448
|
4926
|
2064
|
66
|
7056
|
|
Percentage of total occupied private
dwellings
|
| 1947 |
45.4
|
8.0
|
53.4
|
44.0
|
2.7
|
100.0
|
| 1954 |
48.2
|
15.2
|
63.3
|
34.3
|
2.4
|
100.0
|
| 1961 |
47.8
|
22.5
|
70.3
|
27.6
|
2.2
|
100.0
|
| 1966 |
na
|
na
|
71.4
|
26.7
|
1.9
|
100.0
|
| 1971 |
na
|
na
|
68.8
|
27.9
|
3.3
|
100.0
|
| 1976 |
32.3
|
35.6
|
68.4
|
25.9
|
5.7
|
100.0
|
| 1981 |
34.2
|
34.0
|
70.1
|
25.7
|
4.2
|
100.0
|
| 1986 |
38.9
|
31.5
|
70.4
|
26.2
|
3.4
|
100.0
|
| 1991 |
41.5
|
27.4
|
68.9
|
27.4
|
3.7
|
100.0
|
| 1996 |
42.5
|
26.5
|
69.0
|
29.9
|
1.1
|
100.0
|
| 2001 |
41.7
|
27.8
|
69.5
|
29.0
|
1.5
|
100.0
|
| 2006 |
35.1
|
34.7
|
69.8
|
29.3
|
0.9
|
100.0
|
|
|
|
|
|
|
|
| na |
not available |
| (a) |
Tables on tenure type in the Census
refer specifically to occupied private dwellings rather than
households. However, for Census purposes, the number of households
is equal to the the total number of occupied private dwellings as a
Census form is completed for each household from which dwelling
information is obtained. |
| (b) |
Many of the figures in this table
originally appeared in ABS, Housing Occupancy and Costs,
2005–06, (Cat. No. 4130.0.55.001), p. 13. |
| (c) |
Excludes 'not
stated'. |
| (d) |
Separate figures for owners without
a mortgage and owners with a mortgage were not available for these
years. |
| (e) |
Census results processed as a 50 per
cent sample due to budgetary restraints. The impact of this on the
distribution of occupied private dwellings by tenure type is not
known. |
| (f) |
Includes owner/purchaser undefined. In
subsequent years only the specific categories of 'owner with a
mortgage' and 'owner without a mortgage' were included on the
Census forms. This may have resulted in some decline in measured
ownership rates. |
| (g) |
From 1991, includes nature of
occupancy for caravans, etc., in caravan parks. |
| (h) |
Includes dwellings 'being purchased
under a rent/buy scheme'. In previous years this tenure category
was not separately catered for on Census forms and it is not known
how households with rent/buy tenure would have responded to the
questions on tenure. |
Unlike the home ownership rate, the trend in outright home
ownership (homes owned without a mortgage) has been far from
stable. After falling from 45 per cent in 1947 to 32 per cent in
1976, the proportion of all households who owned their home
outright rose in subsequent Censuses, reaching 43 per cent in 1996.
It was 42 per cent in 2001, after which it recorded its biggest
intercensal fall to 35 per cent in 2006.
The SIH was run in most years from 1994 95 to 2003 04, and is
now conducted biennially. Data from the SIH are shown below where
it will be noted that, as with the Census, the home ownership rate
has varied little from 70 per cent over the life of the survey.
Moreover, as with the Census, the SIH has recorded a sharp fall in
the rate of outright home ownership, from 43 per cent in 1995 96 to
34 per cent in 2005 06. Arguably, one of the factors contributing
to the fall in outright home ownership was the substantial increase
in established house prices over this period up by 127 per
cent.[3]
Table 2. Households by tenure type – ABS Survey of
Income and Housing data
|
Owner
households
|
|
|
Year(a)
|
Owner
without a
mortgage
|
Owner
with a
mortgage
|
Total
|
Renter
|
Other
tenure
type
|
Total
|
|
No. of households
('000)
|
|
1994–95
|
2736
|
1938
|
4674
|
1682
|
190
|
6547
|
|
1995–96
|
2849
|
1871
|
4720
|
1791
|
146
|
6657
|
|
1996–97
|
2796
|
1916
|
4712
|
1889
|
169
|
6771
|
|
1997–98
|
2726
|
2133
|
4859
|
1877
|
166
|
6902
|
|
1999–00
|
2749
|
2286
|
5035
|
1937
|
150
|
7121
|
|
2000–01
|
2794
|
2348
|
5142
|
2004
|
168
|
7315
|
|
2002–03
|
2780
|
2528
|
5309
|
2154
|
176
|
7638
|
|
2003–04
|
2700
|
2715
|
5415
|
2135
|
186
|
7736
|
|
2005–06
|
2718
|
2772
|
5490
|
2261
|
175
|
7926
|
|
Percentage of total
households
|
|
1994–95
|
41.8
|
29.6
|
71.4
|
25.7
|
2.9
|
100.0
|
|
1995–96
|
42.8
|
28.1
|
70.9
|
26.9
|
2.2
|
100.0
|
|
1996–97
|
41.3
|
28.3
|
69.6
|
27.9
|
2.5
|
100.0
|
|
1997–98
|
39.5
|
30.9
|
70.4
|
27.2
|
2.4
|
100.0
|
|
1999–00
|
38.6
|
32.1
|
70.7
|
27.2
|
2.1
|
100.0
|
|
2000–01
|
38.2
|
32.1
|
70.3
|
27.4
|
2.3
|
100.0
|
|
2002–03
|
36.4
|
33.1
|
69.5
|
28.2
|
2.3
|
100.0
|
|
2003–04
|
34.9
|
35.1
|
70.0
|
27.6
|
2.4
|
100.0
|
|
2005–06
|
34.3
|
35.0
|
69.3
|
28.5
|
2.2
|
100.0
|
|
(a) Data unavailable for years 1998–99, 2001–02 and
2004–05.
|
|
|
|
|
Source: ABS, Housing Occupancy and Costs, 2005–06, (Cat.
No. 4130.0.55.001)
|
|
|
One of the main demographic influences on home ownership is age.
Not unexpectedly, the tenure of a household is strongly related to
different life cycle stages, generally following a pattern of
renting during the early years, moving to home purchase and
mortgages during the stage of family formation, followed by
outright home ownership in older age.[4] Based on data from the SIH, the table
below shows that in 2005 06 the rate of home ownership increased
steadily from 22 per cent for households where the reference person
was aged 15 24 years to 88 per cent for households where the
reference person was aged 75 years and over. The rate of outright
home ownership followed a similar pattern, while the proportion of
households with a mortgage increased with each cohort to age 35 44
years, after which it then declined.
Table 3. Households by tenure and age of reference
person, 2005–06
|
Owner
households
|
|
|
|
|
|
Age of reference person
|
Owner without a
mortgage
|
Owner with a
mortgage
|
Total
|
Renter
|
Other
tenure
type
|
Total
|
Number of
households
|
|
Percentage of all
households
|
('000)
|
|
15–24
|
2.7
|
18.8
|
21.5
|
74.6
|
3.9
|
100.0
|
379
|
|
25–34
|
6.5
|
41.2
|
47.8
|
49.1
|
3.1
|
100.0
|
1386
|
|
35–44
|
12.4
|
53.8
|
66.2
|
32.0
|
1.8
|
100.0
|
1704
|
|
45–54
|
29.3
|
48.6
|
77.9
|
20.6
|
1.5
|
100.0
|
1608
|
|
55–64
|
53.7
|
27.5
|
81.2
|
17.3
|
1.5
|
100.0
|
1261
|
|
65–74
|
74.6
|
7.5
|
82.1
|
15.5
|
2.4
|
100.0
|
858
|
|
75 and over
|
84.7
|
2.8
|
87.5
|
9.6
|
2.9
|
100.0
|
730
|
|
All households
|
34.3
|
35.0
|
69.3
|
28.5
|
2.2
|
100.0
|
7926
|
|
Source: ABS, Housing Occupancy and Costs, 2005–06, (Cat.
No. 4130.0.55.001)
|
Another demographic influence on home ownership is the
composition of households. Table 4, also based on data from the
SIH, shows that in 2005 06, above average rates of home ownership
were experienced by households composed of couple only families (80
per cent) and couple families with dependent children (79 per
cent), while rates below the average were experienced by group
households (21 per cent), lone person households (59 per cent) and
households composed of one parent families with dependent children
(40 per cent). The pattern of outright home ownership, however, was
very different. Rates of outright home ownership were well below
the average for households composed of couple families with
dependent children (17 per cent) but above the average for lone
person households (40 per cent).
Given the close association between home ownership and the age
and household composition of the population, it follows that
changes in Australia s population structure will have important
implications for the home ownership rate. Consider, for example,
the ageing of Australia s population. Between 1971 and 2006, the
median age of the population has increased from 27.5 to 36.6
years.[5] Since home
ownership increases with age, a consequence of Australia s ageing
population has been to put upward pressure on the home ownership
rate.[6]
Table 4. Households by tenure and family composition of
households, 2005–06
|
|
Owner households
|
|
|
|
|
|
|
Owner without a mortgage
|
Owner with a mortgage
|
Total
|
Renter
|
Other
tenure
type
|
Total
|
Number of households
|
|
Percentage of all households
|
('000)
|
|
One family households
|
|
|
|
|
|
|
|
|
Couple family with dependent children
|
17.0
|
61.8
|
78.8
|
19.7
|
1.5
|
100.0
|
2079
|
|
One parent family with dependent children
|
12.8
|
27.0
|
39.8
|
58.5
|
1.7
|
100.0
|
539
|
|
Couple only
|
50.3
|
30.0
|
80.3
|
18.4
|
1.3
|
100.0
|
2044
|
|
Other one family households
|
43.8
|
32.1
|
76.0
|
22.7
|
1.3
|
100.0
|
914
|
|
Multiple family households
|
34.5
|
40.7
|
75.2
|
23.7
|
1.1
|
100.0
|
83
|
|
Non-family households
|
|
|
|
|
|
|
|
|
Lone person
|
40.3
|
18.2
|
58.5
|
37.2
|
4.3
|
100.0
|
2033
|
|
Group households
|
7.6
|
13.2
|
20.8
|
75.7
|
3.5
|
100.0
|
235
|
|
All households
|
34.3
|
35.0
|
69.3
|
28.5
|
2.2
|
100.0
|
7926
|
|
Source: ABS, Housing Occupancy and Costs,
2005–06, (Cat. No. 4130.0.55.001)
|
The composition of Australian households has also undergone
change over time, though its impact on the home ownership rate has
been quite different from that brought about by an ageing
population. The main trend in household composition has been a
gradual decline in the relative importance of couple family
households as rates of family dissolution and the proportion of the
population who have never married have increased.[7] Based on data from the Census, the
number of couple families as a proportion of all families has
decreased by five percentage points between 1976 and 2006, from 88
to 83 per cent. At the same time, there has been an increase in the
relative significance of one parent family households and lone
person households.[8]
In other words, there has been a shift away from households with an
above average rate of home ownership to those with a below average
rate. These changes have put downward pressure on the home
ownership rate.[9]
In addition to demographic influences, the rate of home
ownership in Australia has also been influenced by a variety of
other factors such as housing affordability, the number of income
earners in a household and the availability of alternative
investment opportunities to housing, such as superannuation and
shares.
The link between housing affordability and home ownership is
obvious, since housing affordability reflects the ability of
households to enter the housing market. The most commonly used
measure of housing affordability is that produced by the Real
Estate Institute of Australia which expresses average home loan
repayments on new loans as a proportion of median family
income.[10]
Fluctuations in housing affordability would be expected to have the
greatest impact on first home buyers and therefore on levels of
home ownership in the younger age groups, which is one of the
reasons why governments have introduced schemes to assist first
home buyers.
Closely associated with housing affordability is the number of
income earners in a household. The growing incidence of two-income
families in Australia has increased the possibility of these
families entering into home ownership. At the same time, however,
it may be argued that this trend has increased the difficulty of
single income households purchasing a home through the effect on
house prices caused by an increased demand for housing.[11]
The growth in superannuation and the changing investment
environment has affected home ownership by affecting the way that
people manage their assets. With an increased range of investment
options open to them, some households have deliberately decided to
rent rather than invest in their own home.[12]
Clearly, a variety of demographic and other factors have
influenced Australia s rate of home ownership. While individual
factors may have had a significant impact, their net effect has
been to leave Australia with an overall rate of home ownership that
has remained remarkably stable for over 40 years.
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