The great Australian dream of homeownership is alive and well, despite the growing housing affordability crisis, according to the latest 2016 census data. However, the nation’s strong overall homeownership rate is masking other issues.
Homeownership is slowly declining
Comparing homeownership rates since the 2011 census, it’s pretty clear there’s a slow but steady decline in overall homeownership rates. It’s down by 2.9%, from 64.9% of all Australian households in 2006 to 62% in 2016.
However, 7.4% of households did not state their housing tenure in last year’s census. This accounts for some of the variation in reported rates of homeownership decline.
There’s been a strong decline in outright homeownership, involving no mortgage debt, from 31% to 29.6% between 2011 and 2016. There’s also been a lesser decline in homeowners who’re purchasing with mortgage debt (33.3% in 2011, compared with 32.4% in 2016).
One aspect of housing affordability that is being masked by these numbers is the ability to purchase a home based on age and income. Recent studies indicate that aspiring first-home buyers try various means to enter the property market, including taking on very high mortgage debt and moving to outer urban locations. Some even delay having children.
The number of renters is on the rise
Given the national obsession with investment in private rental, it’s no surprise that the proportion of Aussie households now renting has also increased. Over the past five years, soaring house prices and ultra-low interest rates have pushed many residents into rental properties.
The 2016 census reveals that the private rental sector has grown in size, from 20.2% in 2006, to 22% in 2011, and to 23.6% in 2016.
Last year, over two million Australian households rented privately, either from real estate agents or private landlords. The growth of the private rental sector highlights the high costs of home purchase. However, many households that rent complain of an overall lack of security and poor control over rental increases.
Related stories:
Mortgage Rates Need To Rise Nearly 6% Before House Prices Begin To Slide Nationwide
Depth Of Housing Affordability Crisis Revealed
