Home ownership rates increase as Millennials buy up

A decade-long decline in home ownership rates were revealed to have stalled in the recent census as Millennials — now the largest generation — climb onto the property ladder.

Trends of declining homeownership rates have been reversed in the latest census.

After years of being derided as the generation that preferred smashed avo on toast rather than a mortgage, millennials are finally biting the bullet and climbing on to the property ladder.

It is partly a function of Generation Y growing up, but also alternative government stimulus and mortgage rates falling over the past half decade to hit record lows at the height of the pandemic.

Census data showed home ownership rates had been mostly stable for four decades to 2006. But in the decade following, the proportion of Australians owning their homes fell from nearly 70 per cent to 67 per cent. The latest count showed the trend did not continue, with rates holding steady in 2021.

As millennials take over as the nation’s largest generation, it would appear the aspiration of a home of one’s own hasn’t dimmed despite it becoming harder to save and far more expensive.

Demographer Simon Kuestenmacher believes the “Great Australian Dream” is still alive, despite various hurdles.

“This narrative that home ownership is a must in your life, is a goal in your life, that’s not going away anytime soon,” he said.

“We now have a big millennial generation, now moving out of their 20s into their 30s. That means they move from the renting phase of the life cycle into the homeowning phase.”

Capital city property prices have risen 170 per cent since 2006. Wages have not kept up, with data from international firm Demographia finding house prices in Sydney are 15 times the median household income, and 12 times in Melbourne.

This is where government stimulus comes in. PropTrack economist Paul Ryan said the various supports in the market have unpinned activity, but perhaps not as much as the government hoped, given there was no significant rise in ownership rates.

“We saw a huge amount of buyer activity over 2020 and 2021,” Mr Ryan said.

“I think there’s been quite a positive evolution of government policy in supporting first-time buyers, away from cash grants and stamp duty concessions … and towards things that were targeted a bit better at just alleviating the burden for people, which is overwhelmingly reaching that deposit hurdle.”

On Friday, another 40,000 places in the federal government’s highly successful First Home Guarantee became available to first-home buyers with a 5 per cent deposit.

National Australia Bank executive of home ownership, Andy Kerr, said it has helped a greater number of people under 30 and singles access the market, many of whom would not have been able to buy otherwise.

“Stable ownership rights and millennials in an environment where house price has been growing very strongly is a good outcome,” he said. “Does that solve the problem? No. Do we need to continue to look for other avenues to do it? Yes. In the current market, all (stimulus is) going to be needed if we want to first hold rates, and then I think increase the level of ownership over time.”

Federal Housing Minister Julie Collins said the scheme – introduced under the Morrison government – complements the suite of ownership programs including Labor’s flagship shared equity program.

“Safe and affordable housing is central to the security and dignity of all Australians,” Ms Collins said. “Tackling housing affordability and helping more Australians into homeownership is a significant challenge and it’s one the government takes seriously.”

Mr Kuestenmacher said no matter how unaffordable housing is, home ownership will increase.