Australia Yearbook - 2001

Chapter 8—Housing 305
Home ownership incentive schemes
Early Commonwealth government schemes, such
as those developed in the 1920s to encourage
home ownership, fell on hard times. This can be
attributed to several factors such as constitutional
difficulties and the economic effects of the Great
Depression and World War II. As a result, home
ownership levels increased only slightly over that
period, reaching 53% by 1947.
Following the creation of the Commonwealth
Housing Commission (CHC) in 1944 and the first
of many Commonwealth State Housing
Agreements (CSHAs) in 1945, policies
encouraging home ownership have been given
high priority. Home ownership has been
promoted through the provision of grants or
guaranteed loans to building societies and banks
to finance construction of owner occupied
homes and to provide increases in the amount of
finance available for housing purposes. In
addition, both Commonwealth and State
Governments have, at various times, provided
direct incentives and grants to home buyers.
Examples of these include low interest loans,
grants to first home buyers and low deposit
‘start-up’ schemes. All of this meant that, by the
early 1970s, Australia had the second highest rate
of home ownership in the developed world,
coming second to only to Iceland. 1 When the
Capital Gains Tax was introduced in the 1980s,
exemptions were made for the profits made from
the sale of the family home.
Since peak levels in the mid 1960s, there has
been a slight decline in the proportion of
households owning or purchasing their own
home. There are a number of possible
explanations. Social changes, such as people
marrying later and delaying to have children, may
cause subsequent delays in the timing of
decisions to purchase a home. In addition, labour
market reforms, which have resulted in a more
mobile labour force and reduced certainty of
employment, may have impacted on people’s
housing decisions. Also, the high interest rates of
the 1980s made housing less affordable, while in
the 1990s, rates of appreciation (price increase)
of dwellings slowed in many areas and were even
negative in some regions. As a result, it is
possible that owner occupation was less likely to
be viewed as the ‘good investment’ it once was,
with some people opting to rent rather than buy
a home and to seek alternative investments.
Public (rental) housing
The provision of low cost, subsidised public
housing was recognised early as an essential
complement to home ownership incentives and
schemes.
After some earlier, tentative starts in Victoria and
New South Wales, the large scale provision of
public rental housing for both moderate and low
income earners got underway after World War II.
Since the mid 1940s, the Commonwealth
Government has facilitated, through successive
CSHAs, the growth (in numbers) of subsidised
rental housing—usually through the provision of
loans to participating States, with low interest
rates and long repayment periods. Continuing
into the mid 1990s, the emphasis has largely
been on retaining public housing levels. For
example, as stock was upgraded and sold off,
earnings were usually pooled back into the
purchase of replacement stock. Through
measures such as these, the proportion of public
housing stock has remained remarkably constant,
at around 5%, since the mid 1960s. Indications
are, however, that absolute numbers are now
starting to decline. As with directions in other
areas of public infrastructure, Commonwaelth
and State Governments are moving to reduce
their levels of investment in public housing.
Private rental assistance schemes
Since the late 1970s, the Commonwealth
Government has broadened its involvement in
private rental assistance programs, progressively
widening the range of persons eligible for
assistance through such schemes. It has also
increased the amount of assistance available to
individuals and families. (For more information
on the private rental assistance scheme, see
section Housing assistance in this chapter.)
Investment in the private rental market has also
been encouraged, largely through the provision
of tax breaks such as depreciation and negative
gearing of rental properties.
Endnotes
1 Housing Australia: A Statistical Overview,
1992 (1320.0).
2 In addition to unpublished data from the
Census of Population and Housing for 1971,
1976, 1981, 1986, 1991 and 1996, data for the
graph and text in this article were drawn from a
range of publications relating to Censuses
between 1911 and 1996.