Australian home ownership stable despite soaring prices

The Australian Bureau of Statistics (ABS) has released home ownership data for the year ended 2019-20, with Australia’s home ownership rate remaining constant at 66%:

Australian home ownership rates

However, there has been a sharp decline in home ownership rates over the past two decades:

  • Home ownership with or without a mortgage decreased from 71% to 66%.
    • Home ownership without a mortgage decreased from 39% to 30%.
    • Home ownership with a mortgage increased from 32% to 37%.

Over the same period, the proportion of households renting rose from 27% to 31%.

Thanks to the sharp fall in mortgage rates, the proportion of gross household income going towards housing costs has fallen for mortgage holders, has risen for private renters, and is marginally higher for owners without a mortgage:

Housing costs

Specifically:

  • Housing costs for owners with a mortgage have declined from 16.6% in 1999-00 to 15.5% in 2019-20;
  • Housing costs for private renters have risen from 19.3% in 1999-00 to 20.2% in 2019-20; and
  • Housing costs for owners without a mortgage have risen from 2.6% in 1999-00 to 3.0% in 2019-20.

With mortgage rates now on the rise, expect housing costs to rise substantially in future reports.

Unconventional Economist

Comments

  1. No information on the age distribution of home owners in that data set. That’s where the changes have occurred.

  2. UE “With mortgage rates now on the rise, expect housing costs to rise substantially in future reports”, it would seem you have never been a computer programmer, as your end result (outcome) does not reflect the facts you presented.
    So lets debug :
    IR’s increase generally equals house price decreases, however =\ if the the majority of home owners don’t have debt associated with the house, then the costs cannot increase, with exception of greedy council rates.
    If you have purchased in the last 36months, increase IR’s and decreased asset value does that equal increased housing costs = no, as you are still paying off the home (shelter)
    If you have not purchased in the last 36months, but intend to and IR’s go to the moon, then prices come down and repayments (captial plus interest) increase, but the cost price is lower and this the overal cost per month decreasez. So does that mean it cost more (housing cost)?

  3. “Housing costs for owners without a mortgage have risen from 2.6% in 1999-00 to 3.0% in 2019-20.” this statement is the most interesting, so cost of owning a home have risen 3% per anum, but I am sure that most houses have increased in value greater than 3% per year.
    Which leads me to the question, what is the solution to provide shelter to all for the benefit of the community?

    • Leroy Huggins

      Immigration control, government controlled, cheap, land releases that specifically exclude all but low to moderate income residential applicants, building subsidies for builds on such lots, and low interest government guaranteed loans, with infrastructure built out to allow (relatively) long-distance commuter suburbs/centres, with a complement of local jobs.

      With immigration curtailed (net zero) Australia’s population would stop growing (intermediate term) and essentially in fairly short order all of Australia would be housed.
      Immigration in the end, (and government delegation of land release and sales to private developers, alongside failure to invest in mass transport to commuter locations), are the only things putting a fully housed population eternally out of reach.

  4. Goodness, in the words of a recent pollie, I’m blessed with a house and wld not like to be borrowing 750k$+ for outer suburb in the hope I can remained employed for 30yrs to pay it orf!

    • DingwallMEMBER

      just the sentiment needed as a leader of Australia, Australians and the Australian economy. ie I helped build this stinking pile of proverbial, and did nothing when it really started steaming and now sit back and watch the populace covered in it.

  5. Leroy Huggins

    You don’t need a large annual complement of new houses, if the population is not growing. Just some replacement of houses that are old and run down.

    Mass immigration in the end is the reason some must miss out, and a complement of people eternally miss out into the future.
    Get rid of it.