Home Ownership Among Young People in Australia: In Decline or Just Delayed

Abstract

Based on census data, a fall in rates of home ownership has been observed among Australians aged less than 35 years. There is debate as to whether this fall is due to changing affordability (Yates 1999, 2002) or to delays in family formation among young Australians (Mudd et al. 2001). The first explanation implies that more Australians will not achieve home ownership across their lifetime; the second that home ownership is merely delayed. Using recent data collections, the proportion that had purchased a house by each age for successive cohorts is examined while simultaneously controlling for family formation and other characteristics. Year of birth is taken as the indicator of changing affordability across time. We find that once other characteristics are controlled, there is no indication of falls in home ownership across birth cohorts. If anything, more recent birth cohorts are more likely to be homeowners than earlier cohorts. Formal marriage is the key variable associated with entry to home ownership.