Peak house: golden year of homeownership uncovered
This is perhaps the most compelling demographic chart I have seen. In this era, we got the housing balance right. What did Australia look like then, and what are the implications for the future?
It is perhaps the most compelling demographic chart I have seen. It comprises a single flowing line that stretches across 110 years, rising, peaking and then stumbling towards the present day.
It is the census-measured proportion of the Australian housing stock that is owned outright or with a mortgage.
There have been snippets of this concept published covering the past 30 years or so but nothing that extends across a century. And it’s the long-term perspective – the grand sweep of history – that gives this chart its perspective, its gravitas.
The chart shows that the Australian people achieved peak homeownership (that is, peak house) of 73 per cent of housing stock in 1966. If there is a golden era, a point at which we got the balance right in being able to deliver homeownership at scale it existed, self-evidently, in this year.
What did Australia look like in 1966? And what are the implications for homeownership in the future?
In 1966, just 20 years after the end of World War II, Australia was being shaped by a generation of 40-somethings who remembered the Depression, who fought in (or provided support for those fighting in) the war, who endured the privations of post-war rationing including a housing shortage in the late 1940s.
To this generation homeownership, however humble, translated into security; it was a piece of Australia, a place from which to raise a family, to chat with neighbours, to commute to work, to enjoy the quietude of Australian suburbia.
The 1966 home, though much parodied by the likes of Edna Everage even at the time, was central to the social contract of being Australian. This place of one’s own was compensation for living so far from (our mostly British) home.
A typical suburban house at this time was a modest three-bedroom, one-bathroom dwelling, perhaps with an indoor laundry (as opposed to an outside washhouse) and maybe even an inside toilet. Many parts of Australia’s capital cities remained unsewered well into the ’60s
The suburban block often comprised a quarter-acre or 1000sq m. Melbourne’s AV Jennings built a business empire after the war delivering house and land packages to middle Australia, including to migrant families.
At this time a single family car was not uncommon but it was far from ubiquitous. The two-car household, a term denoting a kind of social progress, flourished later in the ’70s.
A 1966 house was not too far removed from Darryl Kerrigan’s Castle (1997) minus the pool room and with fewer parked cars in the driveway. (Darryl’s pool room may have been added just before the 1991 recession we had to have.)
What I find striking about this 110-year perspective of homeownership is the surge in prosperity that was converted into rising homeownership rates after World War II. This key figure jumped from 56 per cent in 1947 to 70 per cent in 1961.
These were homeownership’s best years. No era before or since has delivered a greater proportionate increase in housing to the Australian people.
The dip and then the rise in homeownership rates between 1971 and 1981 reflect a change to the way the housing question was asked. By 1986 the question reverted to a simpler format and the long-term trend was reinstated.
Across the 55 years to 2021 the Australian people reduced homeownership rates by a mere 10 percentage points, from 73 per cent to 63 per cent. What we got in return for this trade-off was the foundation of the modern liberal society we enjoy today.
This shift away from homeownership supported demand for apartments or flats in the ’70s that manifested in two and three-level walk-up buildings constructed in the inner city (for example, St Kilda and Bondi) at this time.
Modern residential tower blocks first emerged in CBD-fringe redevelopment projects (South Sydney, Docklands) from the late ’90s onwards. The nature of our cities started to change: our beloved suburbia was making way for an emerging apartmentia.
And the driving force behind this change was our shifting values and behaviour. In 1966 the average age at first marriage for an Australian woman was 21, while for men it was 23. The average age at first confinement (baby) at this time was 23. Back then young couples were focused very early on the business of owning a home.
Within five years of peak house in 1966 young Australians, and indeed many in the Western world, were making different life choices.
Young women wanted the freedom to pursue other options in their 20s including further education, travel (hence the need for new terms such as gap year) as well as the option of continuing to work. Young Australians, similar to their counterparts in Britain and the US, wanted to live together to trial relationships before making a commitment.
Australia’s peak house (1966) represented the last vestiges of an old Australia that existed just before a cultural revolution. The 1966 census made no provision for capturing defacto relationships: at that time Australians were single, married, separated, divorced or widowed.
The nation changed profoundly after the 1966 census that captured record homeownership levels. And it wasn’t such a bad deal: across a half-century we traded off a mere 10 percentage points in homeownership rates across Australia to deliver better, freer, fairer life options initially to the 20-something baby-boomer generation, and then to their young Gen-Xer and millennial successors.
This paved the way to greater labour force participation for women, to improved levels of education (and especially in the ’70s with the advent of fee-free tertiary education), and ultimately to the formation of a knowledge worker cohort that is central to our workforce and prosperity today.
Fewer young, more older homeowners
The change in Australia since 1966 is illustrated in a chart that compares the proportion of the population by single year of age. Australians today are living longer, are having smaller families and we’re importing vast numbers of 20-somethings (students mostly). Overseas students living in Australia for a year or more are counted as part of our resident population.
Indeed, more Australians are now carrying homeownership into their extended retirement years. Housing used to be owned by the young and the middle-aged whereas today it seems housing is more likely to be owned by the middle-aged and the aged.
Plus capital city markets have been skewed by social and demographic change. Global cities such as Sydney attract young workers and students including from regional areas.
It’s a rite of passage: young Australians (more women than men) leave the regions in pursuit of job opportunities, education and training in capital cities.
The push back to the regions typically begins in the early 50s after adult children leave the family home.
More young workers and students cascading into Sydney and similar cities such as Melbourne amp up demand for apartments. Rising house prices across time enable older homeowners to cash in and move out, typically to lifestyle zones within a two-hour drive of the city centre, along the coast or inland.
Strong levels of immigration and especially since the reopening of the borders hypes demand for housing in Australia’s global or gateway cities that attract skilled workers.
Believers out, defacto in
At the time of peak house in 1966 the proportion of the Australian population born overseas was 14 per cent.
Most immigrants were drawn from Britain and elsewhere in Europe including Italy and Greece. Today this proportion has jumped to 29 per cent with the immigrant mix broadening to include China, India and The Philippines. New Zealanders flow backwards and forwards in response to perceived economic (job) opportunity.
Part of the social shift that has changed Australia since peak house is the diminution of belief. The Australian census asks questions about religious affiliation. In 1966 the proportion of Australians who believed in a god (of any sort) was 89 per cent whereas today this figure is 62 per cent.
A little more than a half-century ago Australians were much more inclined to believe in a hereafter. Today we’re more focused on the here and now.
Maybe this is a bit of a stretch, but is it possible that believers are a tad more inclined to sacrifice now to achieve rapture and/or salvation – or at least homeownership – later?
While homeownership rates were much higher 58 years ago this peak was achieved by a community that was on the brink of profound change. I don’t think anyone wants to return to the social structures and behaviours of 1966, but this exercise does show the extent to which homeownership rates are tied to demography.
An increase in homeownership rates isn’t going to be achieved by tinkering at the edges. It requires a full-court press; it is an issue that must be addressed by all levels of government; it is a problem that requires bold initiatives.
For Australia to lift homeownership rates to 1966 levels (to 73 per cent) it would require the transfer of one million dwellings out of the rental market and into the hands of homeowners.
I think we need to start by setting a target of what proportion of home ownership we believe reflects our core values of everyone being able to aspire to the Australian Dream, to homeownership.
At the moment this proportion is a bit under two-thirds; in 1966 it was closer to three-quarters. By the time the 2026 census figures are released (in late 2027) this proportion must be shown to have increased perhaps to 66 per cent.
Here is our target benchmark, a metric that compares Australian life today with Australian life at 17 points across 110 years through pandemic, recession, Depression and war.
We are the Australian people. Our values are based on fairness and on the ideal that young Australians can reasonably aspire to owning their own home.
We can commit to this kind of thinking as a national goal, or we can make all the right gestures and let a 110-year Australian ideal with regard to housing slip further towards oblivion.
The next census will tell us which track we’re on in the early decades of the 21st century.
Bernard Salt is founder of The Demographics Group. Data by data scientist Hari Hara Priya Kannan.
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‘Integrating old and new’: the shifting sands of home-affordability
James Dowling
Maria Spathis has lived in the same Maroubra home since 1969, alongside four generations of her family.
The 72-year-old likens the house in Sydney’s east to a stepping stone for her Greek family into Australia and the adult world.
Seven minutes from the beach, 12 from the airport and 20 from the city, Mrs Spathis has watched her migrant neighbourhood become some of the most prized real estate in Sydney.
“My husband and I, we moved here as newlyweds, it was really hard because the house was $25,000 then,” Mrs Spathis said.
“Then we extended this house, his parents moved here, we lived here, I raised both my children here and then my daughter’s raising her children here, integrating old and new.
“I migrated when I was seven, so being a migrant I’m used to having a mixture of old and [young people] coexisting.”
In 1966, three years before Maria and her husband bought their Maroubra home, Australia reached peak homeownership.
As demographer Bernard Salt writes, it was the golden year when Australians, with or without a mortgage, owned 73 per cent of housing stock.
Coinciding with Australia’s migrant boom, metropolitan suburbs grew and houses began to include luxuries like indoor toilets as standard fixtures.
In the 57 years since, homeownership has dropped to 63 per cent, with a shift from suburbia to what Salt calls “an emerging apartmentia”, a trend driven by a more liberal, diverse and work-focused homeowner base.
The demographic, however, still does not match the general working population of Australia as prices inflate amid Australia’s housing crisis.
“I love the area, I’ve been in it here for over 52 years,” says Mrs Spathis. “It’d be hard for me to move anywhere else because I know so many people, you go to the shops and you see half the neighbours are there.
“It’s the community, even though maybe half of these people aren’t living on that street, you get to know them. The cost of living has gone up, the bills have gone up, and for some reason this area has become outrageously expensive, and I don’t know why. “Hundreds of young people can’t really afford to live here unless they earn astronomical [wages].”
Next door to the Spathis family live Aliki and Chrysanthi Coroneos, also Greek migrants. The mother and daughter have lived on the same street since 1967, the year Chrysanthi was born.
“There weren’t that many cars around when we were younger, there was one car per house,” Chrysanthi says.
“People were very friendly and respectful of each other, never had any troubles on the street at all.
“It was really easy to get up on the street and play a bit of street tennis, or a bit of cricket.”
The Coroneos family also valued the huge mix of immigrant communities in Maroubra, but found that the area was now not affordable for many new families.
“The house was relatively cheap. Now I think it’s really expensive. It is in the millions,” Chrysanthi says.
