Money: Home ownership continues to fall as the great Australian dream gets more distant for many - PressFrom - Australia
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MoneyHome ownership continues to fall as the great Australian dream gets more distant for many

03:10  18 july  2019
03:10  18 july  2019 Source:   msn.com

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A new ABS study has found, while housing affordability has not changed much in 20 years, rates of home ownership have fallen to the lowest level since its survey started.

A new ABS study has found that while housing affordability has not changed much in 20 years, rates of home ownership have fallen to the lowest level since its survey started.

Home ownership continues to fall as the great Australian dream gets more distant for many© Provided by Australian Broadcasting Corporation The proportion of Australians owning their own homes has fallen steadily over the past two decades. (ABC News)

The great Australian dream of home ownership appears to be just that — a dream — for an increasing number of Australians, with now nearly a third of households renting.

Twenty years ago only about quarter of Australian households rented.

The flip side is that home ownership has fallen from 70 per cent of households in 1998 to 66 per cent last year, according to detailed analysis from the Australian Bureau of Statistics.

It is the lowest proportion of home ownership in Australia since the ABS started the data series in 1994.

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For many young people across the United Kingdom, the prospect of one day owning their own home has become a very distant dream . At regional level, London has experienced the greatest decline in home ownership among young Any more questions? Get in touch with us quickly and easily.

Fewer Australians own homes than ever before. The more retirees who rent, the greater the level of government outlays to assist with paying those rents. Expectations for more interest rate rises in the US have been dealt a blow because (and stop me if you’ve heard this before) while they have had

However, while home ownership is on the slide, the proportion of households still in debt has risen sharply.

Two decades ago, 40 per cent of households had paid off their mortgage. Last year that figure had fallen to 30 per cent.

While those renting, as a proportion of all households, rose from 27 per cent to 32 per cent over the period of the study, the proportion of public housing tenants halved from 6 per cent to 3 per cent of the population.

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Renters spend more on housing than owners

The ABS study found the average weekly housing costs for all Australian households were $311, but vary significantly for different tenure types.

  • $53 for owners without a mortgage
  • $484 for owners with a mortgage
  • $366 for renters

Over the past 20 years, that represents a 51 per cent increase in housing costs (inflation adjusted) for mortgage-free households and public housing tenants and a 52 per cent increase in costs for renters.

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Home ownership in Australia is considered a key cultural icon, and part of the Australian tradition known as the Great Australian Dream of "owning a detached house on a fenced block of land." Home ownership has been seen as creating a responsible citizenry

Many prospective first home buyers feel they 'would be chasing constantly rising prices.' In February, Haddow succeeded in purchasing a two-bedroom Some are choosing to forgo the great Australian dream of the family house on the quarter-acre block in exchange for a shorter commute and closer

But falling interest rates have meant that costs for those with mortgages rose by a comparatively more modest 40 per cent.

"Interest rates have remained relatively low over the past several years and we have seen a recent softening in the rental market in some major cities," ABS chief economist Bruce Hockman said.

"The data shows that renters continued to devote more of their income to housing than home owners."

On average, private renters paid 20 per cent of their income on housing costs, compared to 16 per cent for owners with a mortgage and 3 per cent for households who owned their home outright.

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Affordability tougher for public tenants

The study also looked at housing affordability via the ratio of housing costs to gross household income.

It found while the affordability ratio had not changed much over 20 years for owners with a mortgage (16 per cent) and renters from a private landlord (20 per cent), it had become much tougher to move out of public housing into home ownership.

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The great divide between home owners and property “have-nots” is widening fast, according to new research commissioned by the publicly listed mortgage broking firm Mortgage Choice. More than 60 per cent of Australians believe only the wealthy can achieve the “ Great Australian Dream ” of home

The great Australian dream of owning your own home may still be there, but for more Australians than ever the reality of the dream is less about owning a house than owing money on a mortgage – and for some – owing money on more than one.

The housing affordability index for public housing tenants has risen from 17 per cent to 23 per cent over the period of the study.

Bad mortgage debt stabilising

In better news for the housing market, the proportion of households slipping behind in mortgage repayments appears to have stabilised after a steady rise earlier in the year.

The global credit rating agency Standard and Poor's said its index for Australian prime mortgages was largely unchanged in May.

"Arrears fell across most of the country in May, with small declines in the key states of New South Wales and Victoria," Standard and Poor's said.

Only the Australian Capital Territory and Tasmania recorded increases.

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However, there is a degree of seasonality in the figures, with declines in arrears commonly recorded in May, once the financial impact of Christmas has washed through and household finances tend to stabilise.

"We expect the stabilisation in arrears to continue in the next quarter," Standard and Poor's analyst Narelle Coneybeare said.

"Interest-rate and tax cuts will assist with debt serviceability, aided by the historical seasonality of arrears.

"We believe these factors will mainly affect the less-severe arrears categories and that borrowers who are deeper in arrears are more likely to struggle due to fewer refinancing options."

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