Why lower home ownership is worrisome

Font size :

Due to the surge in house prices, the rate of home ownership has also declined, with the most pronounced slump being seen in the hot property market of Sydney and Melbourne.

According to the latest installment of the Household, Income and Labour Dynamics in Australia Survey (HILDA), the proportion of homeowner households in NSW has fallen steadily since 2001 to a historic low of 62.5 per cent. Victoria also fell to 66.1 per cent.

The low rate of home ownership can be a huge problem, especially for retiring Australians. The country’s retirement income system rests on an implicit assumption that most retirees own a home, so the fact that more retirees are now non-homeowners will put an additional pressure on the federal budget. The high cost of housing can also make people reach retirement age with an outstanding home loan, resulting in more old-age poverty.

It is also problematic for start-ups, as it is common for entrepreneurs to use the equity in a home as a collateral for loans to establish small businesses. Eventually, it can have adverse economic consequences given the important contribution small business make to the employment sector.

The decline in the rate of home ownership also widens the generational wealth gap, resulting in greater polarisation in the distribution of wealth in the future. Furthermore, it has changed the dynamics in the rental market, especially among younger people.

“They are pushing up rents in the private rental market to the detriment to a group that in days gone by would always have been in that private rental market,” said economist Sail Eslake. “It is, therefore, a cause of increasing rental stress for low income earners.”

It can be confusing to know whether to get a variable rate or fixed rate mortgage, and what features are important. That's why it's important to not only check the right rates, but make sure that you're getting the right features in your home loan. Get help choosing the right home loan

Mortgage News and Articles

How to tell when a housing market is cooling How to tell when a housing market is cooling

You need to check clearance rates, listings, and the price gap, among other factors Read more

Growing demand for green apartments in Sydney Growing demand for green apartments in Sydney Both owner-occupiers and investors favour eco-friendly buildings for their energy-saving features and reduced environmental footprint ... Read more

Are property investors as rich as they appear? Are property investors as rich as they appear? A multi-property portfolio doesn’t guarantee easy millions ... Read more

Be proactive about getting a better mortgage deal Be proactive about getting a better mortgage deal Apathy could be costing you a considerable amount of money over the lifespan of your loan ... Read more

More mortgage news and articles

Sponsored Links

Saturday, Sep 23, 2017
Top Featured Rates
Top Bank Rates

Get help choosing the right home loan

Let us help you find the right home loan for your needs.

Tell us a bit about your circumstances:
  • Purpose of mortgage
  • Household Income
    $
  • How much do you want to borrow?
    $
  • How much deposit do you have?
    $
  • How much is your house worth?
    $
  • How much do you still owe on your mortgage?
    $
  • What type of mortgage do you have?


  • How much is your new home?
    $
  • How much do you want to borrow?
    $
  • How soon do you want a mortgage?
Next
  • First name
  • Last name
  • Where do you live?
  • Phone number

Special Offers

Related Keywords