Thursday, November 17, 2011

Our houses are emptying, as are our dreams of owning them outright

We’ve more and more bedrooms, but they are more and more empty. The latest biennial Bureau of Statistics housing survey finds us with more empty bedrooms than ever before and also less likely than ever to own our homes outright.

Traditionally one of the world’s highest, Australia’s rate of outright home ownership has slipped from 42 per cent to 33 per cent in the past fifteen years. At the same time the proportion of households attempting to buy with a mortgage has climbed from 30 to 36 per cent and the proportion renting privately has climbed from 18 to 24 per cent.

The changes follow new tax rules that made negative gearing more attractive from late 1999 increasing the number of landlords and pushing house prices beyond the reach of many would-be home buyers. The ABS says the average first home buyer loan climbed from around $160,000 to to near $280,000 between 2001 and 2011.

The Bureau says the slide in outright home ownership may also reflect the increasing use of redraw facilities which allow mortgagees to top up rather than pay off their mortgage.

There’s certainly more room per person. Over the past fifteen years the number of people living in private houses has climbed 23 per cent. The number of houses has climbed 28 per cent. The average household size has slid from 2.7 to 2.6 people but the average number of bedrooms has climbed from 2.9 to 3.1.

The Bureau says this means by international standards more than three quarters of Australian households now have one or more spare bedrooms... Among the predominantly empty-nesters who’ve paid off their mortgage the figure approaches 90 per cent.

Only 3 per cent of households don’t have enough bedrooms.

Mortgages have the highest housing costs averaging $408 per week when the mortgage, water charges and rates are taken into account. Private renters pay on average $305 per week, public renters pay $119 per week, and outright owners just $35 per week.

But private renters pay the highest proportion of their income in housing costs, an average of 20 per cent, and have suffered the worst increases. Renters costs have climbed 45 per cent after adjustment for inflation over the past 15 years. Mortgagees costs have climbed 42 per cent.

"Households on a single wage would struggle to pay $460 a week which is the new median cost of first home buyers,” said Sarah Toohey, campaign manager for Australians for Affordable Housing. “They are having to question other financial decisions such as whether to have children and they are increasingly vulnerable to life changes like illness or retrenchment".

Published in today's SMH and Age

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