Owner occupation and profit : the creation and capture of value through Canberra's residential property market

Abstract

This study examines the material advantages attached to owner occupation in Canberra between 1962 and 1981. Canberra's housing market was used to review the debate on domestic property and land rent A number of authors (Saunders, 1978, 1979; Pratt 1982) contend that ownership of residential property generates significant economic interests independent of production within society. Other researchers rejected this view and denied the significance of gains through housing (Edel, 1982; Edel, Sclar and Lamia, 1984). One of the first objectives of this thesis therefore was to ascertain the nature, size and origins of any benefits accrued through the ownership of housing. The history of property ownership in nine suburbs was examined and the benefits associated with property ownership calculated. The study found that home purchasers in Canberra with bank finance were typically $32,000 better-off once their dwelling was sold. The level of benefits received varied according to socio-economic status. The largest gains were accrued by the owners of the most expensive dwellings. The rats of return on the household's capital, however, was not influenced by factors associated with social class or prestige. Market conditions determined the rate of return with the greatest percentage gains to households which purchased while the market was low and sold during a boom. The receipt of benefits through housing reflected the history of real property within societies with a British legal heritage, Canberra's special development history and Australia's post-War housing system. It was concluded that explanations of housing-related benefits must recognise that land is property like any other. The commodity nature of housing \s a function of the the importance of production and the conditions associated with the production of wealth in society. In addition, the market's role in the capture of benefits through housing must be accepted. Price fluctuations determine the nature and size of any gains collected. Show more