Australia has exhibited a remarkably stable home-ownership rate of 70 per cent for over thee decades. However, this paper questions whether this rate is sustainable. Decomposition techniques based on tenure choice models are used to provide evidence of changing homeownership patterns in Australia between 1975 and 1994. The results indicate a distinct change in home-ownership propensities which is neither uniform across age-groups, nor uniform for different household types with both the same and with different levels of income. A number of tentative explanations are proposed, each of which provides the basis for further research on the factors affecting household tenure decisions. This is essential if the potential for a significant decline in home-ownership is to be seen as a matter of concern.
Get full access to this article
View all access options for this article.
References
1.
Australian Bureau Of Statistics (1992) Social Indicators. Cat. No. 4101.0. Canberra: Australian Bureau of Statistics.
2.
Australian Bureau Of Statistics (1996a) Housing Australia, A Statistical Overview. Cat. No. 1320.0. Canberra : Australian Bureau of Statistics.
3.
Australian Bureau Of Statistics (1996b) Household Estimates, Australia. Cat. No. 3229.0. Canberra : Australian Bureau of Statistics.
4.
Australian Bureau Of Statistics (1997a) Census of Population and Housing. Cat. No. 2015.0. Canberra : Australian Bureau of Statistics.
5.
Australian Bureau Of Statistics (1997b) Australian Social Trends, Cat. No. 4102.0. Canberra: Australian Bureau of Statistics.
6.
Baekgaard, H. (1998) The impact of increasing house and share prices on the distribution of household wealth in Australia. Paper presented to the 27th Annual Conference of Economists, Sydney, 28 September-1 October.
7.
Blinder, A. (1973) Wage discrimination: reduced form and structure estimates, Journal of Human Resources, 8, pp. 438-455.
8.
Blinder, A. (1976) On dogmatism in human capital theory, Journal of Human Resources, 11, pp. 8-22.
9.
Boehm, T. (1993) Income, wealth accumulation and first-time homeownership: an intertemporal analysis, Journal of Housing Economics, 3, pp. 16-30.
10.
Borsch-Supan, A. and Pitkin, J. (1988) On discrete models of housing demand, Journal of Urban Economics, 24, pp. 153-172.
11.
Bourassa, S. (1994) Gender, marital status and home ownership in Australia , Journal of Housing Economics, 3, pp. 220-239.
12.
Bourassa, S. (1995a) A model of housing tenure choice in Australia , Journal of Urban Economics, 37, pp. 161-175.
13.
Bourassa, S. (1995b) The impacts of borrowing constraints on home-ownership in Australia, Urban Studies, 32, pp. 1163-1173.
14.
Bourassa, S. and Hendershott, P. (1995) Australian capital city real house prices, 1979-1993 , Australian Economic Review, 95(3), pp. 16-26.
15.
Bourassa, S., Greig, A. and Troy, P. (1995) The limits of housing policy: home ownership in Australia, Housing Studies, 10, pp. 83-104.
16.
Bourassa, S., Haurin, D., Haurin, J. and Hendershott, P. (1994) Independent living and home ownership; an analysis of Australian youth, Australian Economic Review, 94(3), pp. 29-44.
17.
Clark, W., Duerloo, M. and Dieleman, F. (1990) Household characteristics and tenure choice in the US housing market, Netherlands Journal of Housing and theBuilt Environment, 5, pp. 251-270.
18.
Clark, W., Duerloo, M. and Dieleman, F. (1994) Tenure changes in the context of micro-level family and macro-level economic shifts, UrbanStudies, 31, pp. 137-154.
19.
Clark, W., Duerloo, M. and Dieleman, F. (1997) Entry to home-ownership in Germany: some comparisons with the United States, UrbanStudies, 34, pp. 7-19.
20.
Das Gupta, P. (1993) Standardization and Decomposition of Rates: A User's Manual, Current Population Reports, Special Studies, P123-186, US Bureau of the Census.
21.
Follain, J. and Ling, D. (1988) Another look at tenure choice, inflation and taxes , AREUA Journal, 16, pp. 207-229.
22.
Ford, J. and Wilco, S. (1998) Owner occupation, employment and welfare: the impact of changing relationships on sustainable home ownership, Housing Studies, 13, pp. 623-638.
23.
Goodman, A. (1988) An econometric model of housing price, permanent income, tenure choice and housing demand, Journal of Urban Economics, 23, pp. 327-353.
24.
Goodman A. (1990) Demographics of individual housing demand, Regional Science and Urban Economics, 20, pp. 83-102.
25.
Green R. (1996) Should the stagnant homeownership rate be a source of concern?, Regional Science and Urban Economics, 26, pp. 337-368.
26.
Gyourko, J. and Linneman, P. (1993) The affordability of the American dream, Journal of Housing Research, 4, pp. 39-72.
27.
Gyourko, J. and Linneman, P. (1996) Analysis of the changing influences on traditional households' ownership patterns, Journal of Urban Economics , 39, pp. 318-341.
28.
Gyourko, J. and Linneman, P. (1997) The changing influences of education, income, family structure, and race on homeownership by age over time, Journal of Housing Research, 8, pp. 1-26.
29.
Hamnett, C. (1994) Social polarisation, economic restructuring and welfare state regimes, UrbanStudies, 31, pp. 401-424.
30.
Harding, A. (1997) The suffering middle: trends in income inequality in Australia 1982 to 1993-94. Discussion Paper No. 21, NATSEM, Canberra.
31.
Haurin, D. and Kamara, D. (1992) The Home ownership decision of female-headed households , Journal of Housing Economics, 2, pp. 293-309.
32.
Haurin D., Hendershott, P. and Kim, D. (1994) Housing decisions of American youth, Journal of Urban Economics, 35, pp. 28-45.
33.
Haurin D., Hendershott, P. and Ling, D. (1988) Home ownership rates of married couples: an econometric investigation, Housing Finance Review, 7(2), pp. 85-108.
34.
Haurin D., Hendershott, P. and Wachter, S. (1996a) Wealth accumulation and housing choices of young households: an exploratory investigation, Journal of Housing Research, 7, pp. 33-57.
35.
Haurin D., Hendershott, P. and Wachter, S. (1996b) Borrowing constraints and the tenure choice of young households Working Paper No. 5630, National Bureau of Economic Research, Cambridge, MA.
36.
Henderson, J. and Ioannides Y. (1986) Tenure choice and the demand for housing, Economica, 53, pp. 231-246.
37.
Hughes, J. (1991) Clashing demographics: home ownership and affordability dilemmas, Housing Policy Debate, 2, pp. 1215-1250.
38.
Hughes, J. (1996) Economic shifts and the changing homeownership trajectory, Housing Policy Debate, 7, pp. 293-325.
39.
Jianakoplos, N., Menchik, P. and Irvine, F. (1989) Using panel data to assess the bias in cross-sectional inferences of life-cycle changes in the level and consumption of household wealth, in: R. Lipsey and H. Tice (Eds) The Measurement of Savings, Investment and Wealth, pp. 553-644. NBER Research Studies in Income and Wealth, vol. 52. Chicago : Chicago University Press.
40.
Johnson, D., Manning, I. and Hellwig, O. (1995) Trends in the Distribution of Cash Income and Non-cash Benefits: An Overview. Canberra: AGPS.
41.
Jones, L. (1995) Testing the central prediction of housing tenure transition models, Journal of Urban Economics, 38, pp. 50-73.
42.
Kendig, H. (1990) A life course perspective on housing choice, in: D. Myers (Ed.) Housing Demography: Linking Demographic Structure and Housing Markets, pp. 133-156. Madison, WI: University of Wisconsin Press.
43.
King, A. and Baekgaard, H. (1996) The dynamics of housing wealth. Paper presented to the 8th National Conference of the Australian Population Association, Adelaide, 3-6 December.
44.
King, M. (1980) An econometric model of tenure choice and demand for housing as a joint decision, Journal of Public Economics , 14, pp.137-159.
45.
Landt, J. (1998) Housing affordability of low-income households in Australia, 1981-82 to 1994-95. Paper presented at the 27th Conference of Economists, Sydney, 28 September-1 October.
46.
Li, M. (1977) A logit model of homeownership, Econometrica, 45, pp. 1081-1097.
47.
Maclennan, D., Meen, G., Gibb, K. and Stephens, M. (1997) Fixed Commitments, Uncertain Incomes: Sustainable Owner-occupation and the Economy. York: Joseph Rowntree Foundation.
48.
Mayer, C. and Engelhardt, G. (1996) Gifts, down payments, and housing affordability , Journal of Housing Research, 7, pp. 59-77.
49.
McDonald, P. (1996) Young people in Australia today: a socio-demographic perspective, in: R. Thanki and C. Thomson (Eds) Mortgaging our Future? Families and Young People in Australia, pp. 16-24. SPRC Reports and Proceedings No. 129, Social Policy Research Centre, University of New South Wales.
50.
Megbolugbe, I. and Linneman, P. (1993) Home ownership, UrbanStudies, 30, pp. 659-682.
51.
Murie, A. and Musterd, S. (1996) Social segregation, housing tenure and social change in Dutch cities in the late 1980s, Urban Studies, 33, pp. 495-516.
52.
Percival, R. (1998) Changing housing expenditure, tenure trends and household incomes in Australia, 1975-76 to 1997. Discussion Paper No. 28, NATSEM, University of Canberra
53.
Pitkin, J. and Myers, D. (1994) The specification of demographic effects on housing demand: avoiding the age-cohort fallacy, Journal of Housing Economics, 3, pp. 240-250.
54.
Smith, L., Rosen, K. and Fallis, G. (1988) Recent developments in economic models of housing markets, Journal of Economic Literature, 26, pp. 29-64.
55.
Varady, D. (1996) Economic shifts and the changing homeownership trajectory, Housing Policy Debate, 7, pp. 293-325.
56.
Wachter, S. and Megbolugbe, I. (1992) Racial and ethnic disparities in homeownership , Housing Policy Debate, 3, pp. 333-370.
57.
Winter, I. and Stone, W. (1998) Social Polarisation and Housing Careers. Working Paper No.13, Australian Institute of Family Studies, Melbourne.
58.
Wood, G. (1990) Housing finance and subsidy systems in Australia , Urban Studies, 27, pp. 847-876,
59.
Yates, J. (1989) Home Ownership: Who Misses Out and Why. Background Paper No. 2, National Housing Policy Review, Department of Community Services and Health, Canberra .
60.
Yates, J. (1997) Changing directions in Australian housing policies: the end of muddling through?, Housing Studies, 12, pp. 265-277.
61.
Yates, J. (1998) Trends in Home Ownership. Sydney : NSW Department or Urban Affairs and Planning.
