Home owners are getting older and wealthier

33 views 2022-07-22 13:18:19

The average Aussie home owner is getting older and wealthier, the OECD’s latest report into housing and taxation shows.

In line with 28 other countries the Paris-based organisation scrutinises in its latest report, home ownership in this country increasingly follows a pattern of concentration among high-wealth households and top income owners.

“High-income households hold a disproportionately large share of housing debt but lower-income households with mortgages generally face higher debt burdens,” the report says.

“Home ownership and housing wealth are strongly associated with age. Older households tend to have high levels of housing wealth but low levels of income, raising potential liquidity concerns linked to the taxation of housing.

“Evidence also shows that home ownership rates have been declining for younger generations, particularly lower-income and lower-wealth households.”

The figures lay bare the challenges that have built up over generations now facing housing minister Julie Collins, charged with overseeing the Labor federal government’s new National Housing and Homelessness Plan. Ms Collins met with her state and territory counterparts last week for the first time.

The federal government plans a $10 billion Housing Australia Future Fund that aims to build 30,000 social and affordable housing properties withing five years, implement Help to Buy – a shared equity program to make it cheaper and easier for Australians to own their own home – and establish a national housing supply and affordability council.

The OECD figures show that between 1981 and 2016, home ownership rates in Australia for households aged 25-34 dropped by 40 percentage points for those in the first income quintile – the lowest 20 per cent of earners – compared to 7 percentage points for households in the top income quintile.

The decrease in home ownership rates was smaller for older age groups, but the size of the drop across generations remains much larger for households in the bottom income quintile compared to households in the top, the figures show.

For households of 55- to 64-year-olds, home ownership rates dropped 16 percentage points in the first quintile and by 1 percentage point in the fifth quintile.

The Australian pattern, replicated in other advanced economies, pointed to a concerning trend of greater inequality, the OECD said.

“These figures illustrate growing concerns about the home ownership prospects of younger generations in OECD countries, as home ownership rates decline and become increasingly reliant on income, wealth, and inheritances,” it said.

“While future generations are therefore likely to see continued drops in home ownership rates over time, households with high income, high wealth, and-or access to significant family resources may instead see rising homeownership rates or at least smaller declines.”

This article is from Australian Financial Review, please click the following link for the original article: https://www.afr.com/property/residential/home-owners-are-getting-older-and-wealthier-20220721-p5b3jp

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