Australia home ownership obsession

Australia's home ownership obsession: A brief
discussion on home ownership in Australia
and The Home Environments of Older People
By Alica Musgrave
Faculty of Business Management
Abstract
The great Australia dream of owning your own home is still alive despite the
various problems plaguing housing affordability, new Census data shows. Even
though the overall home ownership trend remains strong, it’s masking other
issues. The latest 2016 Census data assesses what the national home ownership
and rental rates are and how these vary location. It also gives us a picture of
mortgage and rental costs. In this paper you will see the results of house
ownership in Australia. And also the home environment of older people.
1.0 Introduction
The latest 2016 Census data assesses what the national home ownership
and rental rates are and how these vary location. It also gives us a picture
of mortgage and rental costs.
Comparing home ownership rates since the 2011 Census, there’s a slow
but steady decline in home ownership rates overall - down by 2.7% from
68.1% of all Australian households in 2006, to 65.4% in 2016. However,
2.7% of households did not state their housing tenure in the 2016 Census.
This accounts for some of the variation in reported rates of home
ownership decline.

This contraction is nowhere of the scale of equivalent falls in home
ownership in the US and UK and New Zealand over the same period.
Figure 1
What’s more interesting than the overall trend, is the greater decline in
outright home ownership, involving no mortgage debt, from 32.1% to
31.0% between 2011 and 2016. There’s also a lesser decline in home
owners who are purchasing with mortgage debt 34.9% in 2011 compared
with 34.5% in 2016.
Figure 2

The opportunity households now have to borrow against their mortgage
loans for spending undoubtedly accounts for some of this change. Also
contributing to this is home purchasers are less likely to reach retirement
age with no remaining mortgage debt, in the same numbers as previous
eras.
Another aspect of housing affordability is masked by these numbers - the
wide variation in being able to purchase a home according to age and
income. Recent evidence indicates would-be-home-owners try various means
including very high mortgage debt and moving to outer urban locations
away from employment and into smaller dwellings, to be able to buy a
house. Some even delay having kids.
Census figures show that for people wanting to purchase a home, a
change in state or city location may be an option. According to the data
Darwin was the most expensive city to buy in, whereas Hobart was the
cheapest for home purchasers.
Figure 3
For households across the income spectrum, 7.2% of purchasers are
paying more than 30% of their income on mortgage costs, the data shows.
This figure is likely to be far higher among the lowest income (40% of
households) for whom such costs place them in housing poverty.
Given the national obsession with investment in private rental, it’s no
surprise that the proportion of all Australian households now renting has
also increased. Census 2016 results show the private rental sector grew in

size, from 21.0% in 2006, to 22.8% in 2011 and to 24.9% in
2016.(theconversation, 2017)
2.0 Capital cities with the highest proportion of renters in Australia
On average Australians are paying $427 per week in rent with rents rising
1.1 per cent in the first quarter of this year.
Sydney-siders paid the highest median rent ($582 per week), while
Adelaide residents paid the least ($374) out of all the capital cities.
But it was Hobart's landlords who scored the best deal, with rents
increased by 5 per cent in the last quarter, and 11.7 per cent in the last
twelve months.
Property owners in the Tasmanian capital are also currently enjoying the
second highest rental yield in the country (5 per cent) — second only to
Darwin (5.8 per cent), according to key findings from data analytics firm
CoreLogic in its Quarterly Rental Review.
2.1 Slow start to the year
Figure 4
Rental rates, on a national basis, lifted by 1.5 per cent in the first
three months of 2017. In comparison, they rose by a slower 1.1 per
cent between January and March, this year.

"The first quarter of each year is typically the strongest for rental
growth, so this is a step down," CoreLogic's head of research
Cameron Kusher said.
Figure 5
"Investors remain most active in NSW and Victoria, and have been
targeting capital growth rather than rental return."(Abc.net.au,
2018)
3.0 The Changing Dream
Over the past few years, housing affordability has regularly dominated
the headlines, initially as rising house prices pushed access to home
ownership out of reach and, subsequently, as increases in interest rates
created repayment problems for those who had taken on significant
amounts of housing debt. Most media attention is focused on the
affordability problems faced by aspiring first home buyers, who are seen
to be giving up the Great Australian Dream. The data in Figure 1 suggest
there is considerable evidence to indicate that they are giving up that
dream. Figure 1 shows a steady decline in age-specific home ownership
rates for younger households from the mid- to late 1970s. Between 1976
and 2001, home ownership rates for those in the 25–29 year old age
group declined by 11 percentage points (from 54 per cent to 43 per cent),
by 10 percentage points (from 67 per cent to 57 per cent) for those in the
30–34 year old age group and by 6 percentage points (from 72 per cent to
66 per cent) for those in the 35–39 year old age group.

Figure 6
This paper examines the implications for young adults of the changing
patterns of investment in housing over several generations. It provides a
brief snapshot of three distinct phases in the evolution of home
ownership: as an aspiration of households in the 1950s and 1960s, as a
driver of inequality for their baby boomer children in the 1970s and
1980s, and as a fading dream of their grandchildren from the 1990s to the
present. Whilst it might be dangerous to use the past to predict the future,
it is equally dangerous to ignore the lessons of the past in determining
what might happen in the future. Badcock and Beer (2000) describe those
who entered home ownership in the 1950s and 1960s as the Safe and
Sound generation and those who entered in the 1970s and 1980s as the
pampered generation. As will be argued below, it is the baby boomer
generation that profited most from home ownership. The question of
whether their Generation X children1 – described by Hugh Mackay as the
Options generation (Mackay, 1997) – can or will enter home ownership
has yet to be answered.
The three sections of this chapter are based on the experiences of these
three generations. The chapter begins with the rise of home ownership in
the period immediately following WWII, and ends with the rise in rental
investment that dominated the most recent house price boom. It describes
how the changing economic and social climate changed the nature of the
Great Australian Dream for each of these generations, and suggests that
this has contributed to its downfall. Chapters two and three highlight
implications of the changes that have occurred and suggest some changes

that might be needed for the home ownership dream of the past to be reimagined
for the future.(Yates, 2007)
4.0 Roadmap to Buying Your First Home
Almost two years ago, I became a homeowner.
I had no idea what I was getting myself into when Kate and I decided we
were ready to buy a home. I naively thought there wouldn’t be much to it.
Visit some open houses, talk to the bank, sign some papers, and boom,
I’d have a piece of the American Dream.
Boy, was I wrong.
Buying a home is a complicated, multi-step process. Down the road we
plan to devote entire posts to many of the steps along the way. Today,
however, we’ve set out to provide you with the big picture of what to
expect when buying your first home. It’s basically the roadmap I wish I
had when I was neck-deep in the process.
Figure 7
It should be noted that each state (and country) has vastly different laws
regarding real estate. This is a rough idea of the process, but especially
when it gets to working with realtors, making offers, and the closing
process, things can look quite different. Research you own state’s or
country’s processes.

4.1 Determine If Buying Is Right for You
Before you start attending open houses and munching on free
cucumber sandwiches, you need to figure out if buying a home is
even the right move for you. It’s a big decision that comes with
huge time and financial commitments. When figuring out whether
buying makes sense right now in your life, take into account your
finances as well as your future plans. For help in thinking through
the pros and cons, check out our guide on whether you should buy
a home or rent.
4.2 Get Your Financial House in Order
Once you decide to move forward, it’s time to get your financial
house in order to prepare for buying a physical one. Here are some
things to consider doing:
Start saving for a down payment. If you haven’t already,
start saving for a down payment on your mortgage. Most
traditional mortgage brokers require that you have at least a
20% down payment to qualify for a mortgage. Even if you’re
able to secure a Federal Housing Administration loan (FHA
loan – for first-time home buyers only), you’ll still need to
have at least a 3.5% down payment (some loans will require
a 5% down payment. For a $250,000 mortgage, that means
you’ll need at least $8,500 in the bank, and that doesn’t
include all the other costs that go along with buying a home,
as we’ll find out later. That’s nothing to sniff at. Start saving
today.
Get a copy of your credit report and credit scores. When
a bank decides whether to loan you money for a home, one
of the things it’s going to look at is your history as a
borrower. They want to know that they can trust you to pay
back this massive amount of money they’re about to give
you. To determine whether you’re creditworthy, the bank or
mortgage broker is going to look at your credit report and
credit score. Before the banks pull your report and score, it’s
a good idea to take a look at them yourself to ensure that
there aren’t any errors that could hurt your chances for

securing a mortgage. Errors to look for include accounts that
don’t belong to you, wrong addresses, incorrect payment
status, and remedied delinquencies not reported as such. If
you find any errors, take action to correct them as quickly as
possible as they can sometimes take a long time (and be nigh
near impossible) to fix.
If you don’t have any errors on your credit report, but your
credit score isn’t that hot, start taking steps to improve it like
paying your bills on time and reducing the amount of debt
you owe.
Gather financial documents. When you apply for a home
mortgage, your financial life is going to be put under a
microscope. You’ll have to provide enough documentation
to prove that you’re financially capable of paying back a
large loan. I wish I had done this step earlier in the process
and not waited until I was actually applying for a loan.
Despite having most of my financial documents digitized, it
was still a chore corralling them together. Below are the
documents you’ll likely need when applying for a mortgage:
• W2 statements (or 1099 income statements) for the
last two years
• Federal tax returns for the last two years
• Bank statements for the last few months
• Recent pay stubs and proof of other income
• Proof of investment income
Get pre-qualified for a loan. Call up your bank and ask to
get pre-qualified for a loan. When you get pre-qualified for a
loan a bank takes a cursory look at your financial status and
tells you whether you’d be able to qualify, and if so, roughly
how much of a mortgage you can get. This can give you a
rough idea of how much house you can afford when you’re
out looking. Getting pre-qualified is quick and easy. You can
usually do it over the phone or even online. One important

thing to understand is that getting pre-qualified for a loan
doesn’t guarantee that you’ll actually get a mortgage for the
amount the bank pre-qualifies you for. That number can
change as the mortgage broker takes a deeper look at
your finances. Again, it’s a rough estimate.(Brett & Kate
McKay, 2013)
5.0 The Home Environments of Older People in Australia
Mick Jagger won’t ever need to be concerned about having somewhere to
live, but older people have worried about where they will spend their
final years since long before the Rolling Stones sang to a generation’s
insecurities in 1969. Many wish to stay in their homes, but current policy
doesn’t support age-friendly housing. It also makes it difficult for ageing
people to manage their finances.
Figure 8
The population of people aged 65 and over in Australia is projected to
grow from 3.7 million to 8.7 million by 2056. Cities, towns and housing
need to be designed to help people stay at home as they age. Financial
policy should be updated to enable them to better manage their assets.

6.0 What is stopping people ‘ageing in place’?
Gwen’s deck of dominoes could not be reconfigured because of the
housing, tax and financial barriers imposed by the same governments that
are trying to implement ―ageing in place‖.
Ageing in place isn’t just about ageing at home. It’s about keeping older
people connected to their neighbourhood and community as part of a
broader framework of ―active ageing‖, with the aim of improving their
quality of life and giving them more control over their circumstances.
Since the World Health Organization (WHO) released its Active
Ageingpolicy framework in 2002, federal governments have endorsed
this approach. The 2013 Living Longer Living Better reforms and last
year’s Legislated Review of Aged Care promote emotional and mental
preparation for old age, which is important for active ageing.
However, many aspects of policy in Australia undermine successful
ageing in place.(Mick Jagger, 2015)
7.0 The Social Home: Roles, Relationships and Networks
The meaning of home as a place to strengthen and secure important
relationships was a theme that emerged strongly from this study. For
some participants, social relationships were of more importance and high
value than other aspects of home such as comfort, ease of access, and
functionality. Relationships that extend outside of the home were as
highly valued as those within the home. Existing social networks
contributed strongly to the essence of what home meant and to the
individuals’ sense of identity. (BondcleaninginPerth, 2015)
This was particularly evident for one participant who reported great
difficulty in managing the steps and bathroom of her current home.
Because minor modifications had given her little functional improvement,
she was offered new fully accessible accommodation less than 1
kilometer away from her current home. One of the main reasons she gave
for declining this move was that she would lose her role as an informal
―bus stop guardian.‖

For many years, she monitored children getting on and off the bus
because the school bus stopped outside her house, with many of them
waiting in her yard in the morning and afternoon under her protective
eye. She valued this role higher than the need for ease of access to her
house or bathroom.
―I enjoy it here. The fact . . . [that] I have about 8 or 10 kids come of a
morning now that school’s started. They wait here; if it’s raining, they
wait on the veranda and otherwise they’ll wait in the yard and go out
when the bus comes for the children . . . and I like to be able to make sure
they’re on the bus safe. Some of them get off here in the afternoon and
the rest will get off in front of their place or another stop further down.
But they all like to get on here. . . . By them being here the bus comes
along up the road here, they walk across to catch it and I know they’re
safe. . . . It makes you feel you’re doing something even though I’m not
really doing anything . . . to most of the neighborhood children I’m
―Nanna.‖ It doesn’t matter whether they are related or not. I’m Nanna.
Even the 18- and 19-year-olds . . . still refer to me as Nanna. I’ve got a
very large family! (Betty, aged 66 years)‖
8.0 The Physical Home—Space and Comfort
Related to the importance of the social experience of home, many
participants emphasized having physical space. For many of the people
interviewed, space was an important factor in their enjoyment of home
because they identified the need to have space for family to come and
stay. Space was also identified as important for keeping pets. Maintaining
a comfortable physical environment, particularly by managing the
discomfort of heat and having pleasing aesthetics, was also an issue for
many participants.
9.0 The Future Home—Out in a Wooden Box
The desire of participants to remain in their current home and not have to
move was strongly evidenced in the findings. This study supports the
often expressed assumption that most people wish to remain in their
home as they age, preferably until they die or at least are not able to
manage for themselves any longer. As for this place, the only way they’ll
get me out of here is to take me out in a wooden box. (Jean, aged 66
years)

10.0 Impact of Home Modifications on the Meaning of Home
Restoring Home as a Place of Security Safety and Comfort In examining
the impact of modifying the physical environment of the home, the
findings show that reducing the demand of the environment through
modifications strengthens the personal home as a place of security, safety,
comfort, and control rather than one of risk, dependence, struggle, or
even imprisonment. Participants of the study spoke of how modifications
have increased independence, safety, and comfort in performing daily
tasks. It’s great, just great. They put grab rails all around. . . . [It’s] safer .
. . [and] it’s more convenient too. It’s much more comfortable. (Colin,
aged 77 years)
‣ Independence, Identity, and Impact on Carers
Participants reported that modifications increased their
independence, allowing for the maintenance of habitual personal
routines. Independence afforded by home modifications also
resulted in greater feelings of control and self-efficacy. Some
participants no longer had to rely on others (community services or
spouses, in particular) to assist in personal care or to provide meals.
In theses cases, modifications reinforce the control an individual
has over routines, daily activities, and others’ access to them
(privacy).
Figure 9

Home, as a place of personal control, mastery, and self-efficacy, is
reinforced. I’ve got more confidence and I don’t have to depend on
somebody to be here in case I fall. It’s made me totally
independent now. (Jean, aged 66 years) In reducing reliance on
carers, who are often spouses or family members, there was often a
reported alteration in the dynamic of the relationship. One
participant reported feeling less ―cosseted‖ by his partner and
others reported that their spouse was less tied to the house and
more able to engage in preferred activities by no longer having to
be present to assist them. To be able to get around like that without
having to be cosseted . . . it’s very important. Luckily I’ve got a
younger wife who [is] very good to me. She looks after me
anyway, but it’s much better if I can do some things for myself. It’s
better for my self-esteem and also for her benefit as well. She’s got
a bad back as well and so it doesn’t help matters. (Colin, aged 77
years) One carer reported a dramatic change in the quality of life
for both her father (for whom she cares) and herself as a result of
having a water lift installed. [It’s been] excellent! We’ve been dirty
stop outs! We’ve been out nearly every day. It’s improved the
quality of life. . . . Oh yeah we were just pulling our hair out—so
locked up! I know what it’s like to be in prison but now we’ve just
been going everywhere. Oh yeah, we’re very very happy. We’ve
never been the happiest as when we saw it. . . . We thought ―Oh,
fantastic.‖ (Rhonda, daughter and carer for Ray, aged 72
years).(Tanner, Tilse, & De Jonge, 2008)
11.0 Growing at Home
Planning ahead is hard because you never know how your needs might
change. The first step is to think about the kinds of help you might want
in the near future. Maybe you live alone, so there is no one living in your
home who is available to help you. Maybe you don't need help right now,
but you live with a spouse or family member who does. Everyone has a
different situation.
One way to begin planning is to look at any illnesses,
like diabetes or emphysema, that you or your spouse might have. Talk with
your doctor about how these health problems could make it hard for
someone to get around or take care of him- or herself in the future. If

you're a caregiver for an older adult, learn how you can get them the
support they need to stay in their own home.(growingold, 2015)
12.0 Conclusion
Memories, too, are cued by the physical environment. When you visit a
place you used to live, these cues can cause you to revert back to the
person you were when you lived there. The rest of the time, different
places are kept largely separated in our minds. The more connections our
brain makes to something, the more likely our everyday thoughts are to
lead us there. But connections made in one place can be isolated from
those made in another, so we may not think as often about things that
happened for the few months we lived someplace else. Looking back,
many of my homes feel more like places borrowed than places possessed,
and while I sometimes sift through mental souvenirs of my time there, in
the scope of a lifetime, I was only a tourist.
I can't possibly live everywhere I once labeled home, but I can frame
these places on my walls. My decorations can serve as a reminder of the
more adventurous person I was in New York, the more carefree person I
was in Paris, and the more ambitious person I was in Michigan. I can't be
connected with my home in the intense way South Asians are in Sax's
book, but neither do I presume my personality to be context-free. No one
is ever free from their social or physical environment. And whether or not
we are always aware of it, a home is a home because it blurs the line
between the self and the surroundings, and challenges the line we try to
draw between who we are and where we are.

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