Home ownership is declining after three decades of stable levels and first home buyers are finding it increasingly difficult to enter the housing market.
Blogger: Peter Bushby, Real Estate Institute of Australia
Over the five years to 2011, home ownership declined by 1.1 percentage points to 67.0% of occupied private dwellings. The drop was evident across all states and territories and was most pronounced in the 35 to 54 age group. In the decade to 2011, home ownership dropped by 4.5 percentage points for the 35 to 44 age group and by 5.5 percentage points for the 45 to 54 age group.
Affordability is identified as the main reason for these changes. One of the most important housing policy instruments in assisting first home buyers with housing affordability is the First Home Owner Grant (FHOG), which was introduced in July 2000.
Ever since the impact of the 2008 Boost to first home buyers ceased, the proportion of first home buyers has been in decline. All state and territory governments except Western Australia and Northern Territory have recently decided to skew assistance away from buyers of existing housing.
These actions appear to be contrary to the Intergovernmental Agreement on Federal Financial Relations, which states that assistance to first home buyers will be “uniform” and that “an eligible home will be new or established”.
I want to see the Commonwealth urge states and territories to either recommit to the Intergovernmental Agreement (IGA) on Federal Financial Relations Schedule A, which states that assistance to first home buyers will be “uniform” and that “an eligible home will be new or established”, or to sign a new IGA.
The socio-economic demographic of most first home buyers shows a clear preference to living close to existing facilities and work as opposed to buying in new housing estates. Lifestyle, environmental impact and proximity to public transport all play a part and that’s why 82% of first home buyers choose established dwellings.
Our parents owned their own homes and my generation was able to enter the housing market at an early age. I want to see young Australians have the same opportunities as we did. Right now though, it’s clearly becoming too tough for first home buyers to enter the market and that’s a crying shame.
About Peter Bushby
Peter Bushby was voted REIA President at the December 2012 AGM. He joined the REIT State Executive in 2003 and was the State President of the REIT for three years from 2007 to 2010. He is an Associate and Fellow Member of the Real Estate Institute of Australia.
Peter has worked in the real estate industry since 1972 and with the exception of a three month contract at Toowoomba has always worked in the Northern Tasmanian regional market of Launceston, and surrounds. He was a partner in Bushby First National before opening his own boutique agency specialising in residential property sales in 1997.
He is a former National Board Member of the First National Real Estate group and chaired their National Marketing Committee. He was involved in the formation of the Professionals in Tasmania and is currently a Tasmanian Property Agents Tribunal panel member.