Home ownership rates at ages 30 to 34 have fallen from a high of 65 per cent among those born in the late 1950s to around 45 per cent for those born in the 1980s, new research from the Australian Housing and Urban Research Institute shows.
According to the AHURI report, Transitions into Home Ownership, the fall in ownership has happened as house prices have nearly tripled, suggesting that increased house prices and falling affordability are linked to this change.
The research also revealed that there has been “incomplete catch-up” as the 1980s cohort ages, leaving a 25 per cent gap in home ownership between the generations.
“Most young people have delayed entry into home ownership but only 75 per cent catch up by age 50,” the report says.
“This fall in ownership rates has coincided with rising house prices and deteriorating affordability. There is evidence that falling housing affordability is associated with a lower likelihood that an individual is observed as an owner-occupier at age 30 to 34.”
AHURI also found that “parental direct and in-kind transfers” (loans or gifts from parents, and co-residing in the parental home) are now very important factors in the transition into first home ownership.
The paper said these findings raise policy issues, including the need to reassess assistance for first home buyers, implications for income support in retirement if more people are renting, and inequities caused by intergenerational transfers.
“Over the past four decades, governments have relied on demand subsidies or concessional tax settings for first home buyers to assist entry into home ownership. Demand subsidies are unlikely to benefit those seeking to enter into home ownership as they tend to increase prices.”