Housing plays a major role in the health and wellbeing of Australians, by providing shelter, safety, security and privacy. The availability of affordable, sustainable and appropriate housing enables people to participate in the social, economic and community aspects of their lives.
Australia’s growing and ageing population, government policy and a range of other factors have an impact on supply, demand and cost of housing. The absence of affordable, secure and appropriate housing can have a number of negative consequences, including homelessness, poor health and lower rates of employment and education. Housing, therefore, plays a major role in the living standards of Australians.
The main sources of Australian home ownership data include the Census of population and housing, the Survey of Income and Housing (SIH), and the Household, Income and Labour Dynamics in Australia (HILDA) Survey.
The latest Australian Bureau of Statistics (ABS) data from the SIH show that in 2015–16, 67.5% of Australian households owned their own home (37.1% with a mortgage, and 30.4% without a mortgage). A further 30.3% were renting, either privately (25.3%) or through social housing programs (3.5%). The proportion of total renters also includes ‘other landlord types’ [1].
Over the last 20 or so years Australia has seen a shift from outright ownership to owning with a mortgage, and a shift from overall home ownership to private rental (SIH data: Figure 1.1). Between 1994–95 and 2015–16, the proportion of outright owner-occupied households fell from 41.8% to 30.4%. Comparatively, the proportion of households owning with a mortgage has increased, from 29.6% to 37.1%, over the same period. Overall, the proportion of households in home ownership fell from 71.4% to 67.5%. There has also been an increase in the proportion of households renting privately (from 18.4% to 25.3%), and a decline in the proportion of households renting through state and territory housing programs (from 5.5% to 3.5%).

Source: [1].
Research has shown that Australia is experiencing generational change when it comes to home ownership, with younger households being affected by factors such as economic constraints, lifestyle choices and work–home preferences; therefore limiting their ability to become home owners [6,13].
Home ownership data from the latest Census, 2016, report a national aggregate home ownership rate of 67%, down from 68% in 2011 (count of occupied private dwellings by nature of occupancy/tenure type; not stated have been excluded). While this aggregate home ownership rate has remained relatively steady at around 67–70% since the mid-1960s, the rate of home ownership for different age groups have varied markedly.
Figure 1.2 displays home ownership rates reported in Censuses in Australia between 1971 and 2016, by selected 5-year age groups. The home ownership rate of 30–34 year olds was 64%, and 50% for 25–29 year olds, in 1971. Forty-five years later these rates have decreased notably, with the home ownership rate of 30–34 year olds falling 14 percentage points to 50%. Similarly, that of 25–29 year olds fell 13 percentage points (to 37%). While declines are evident for other age groups they are much less marked.
Fewer Australians are tending to own their home at retirement. For Australians nearing retirement, for example, age groups 50–54, 55–59, and 60–64, home ownership rates peaked in 1996 at 80%, 82% and 83%, respectively (Figure 1.2). Since 1996 however, there has been a gradual decline in home ownership rates, most notably in the 50–54 age group which has seen a 6.6 percentage point fall over these 20 years (from 80.3% to 73.7%).

Notes
- Data exclude ‘not stated’.
- ‘Not stated’ could not be extracted for Census data in 1991, and therefore are not reported here. Linear interpolation has been used to account for the missing data from 1991.
Source: ABS Census data, 1971 to 2016, AIHW customised data report.
Global comparison in home ownership
Despite changes in housing tenure over time, home ownership is still the most common tenure type in Australia, as it is in many other Organisation for Economic Co-operation and Development (OECD) countries and European Union (EU) member states [9] (Figure 1.3).
In the OECD countries and EU member states, except for Switzerland and Germany, owner households (outright or with a mortgage) are more common than rental households (private market or subsidised). Notably, former communist countries of Central and Eastern Europe have a very high share of home-owners without a mortgage, because after the fall of the communist regimes tenants were offered the opportunity to buy the dwellings in which they lived at a low price [9].
There is considerable variation in home ownership rates across OECD countries and EU member states. Factors such as differing access to finances, mortgage market deregulation, and bank lending policies contribute to this variation. While Australia ranks in the lowest quarter in terms of aggregate home ownership rates (twenty-ninth out of thirty-seven countries), it ranks in the top third for home owners with a mortgage (twelfth) (Figure 1.3). It is similar to the United Kingdom and Portugal at around 30%. In addition, Iceland ranks highly for the proportion of home owners with a mortgage (55%), but is one of the lowest for outright home ownership (19%). Conversely, Romania ranks the highest in the proportion of outright home owners (96%), and lowest for home owners with a mortgage (1%).

Notes
- Year of collection and method of collection varies across countries and may affect comparisons. Data for Australia are sourced from the Household, Income and Labour Dynamics Survey 2014.
- Percentage of renter (private and subsidised) and ‘Other, unknown’ not shown.
- OECD countries and European Union member states are displayed from collated data in the Affordable Housing Database.
Source: [9].
Housing affordability
The term ‘housing affordability’ usually refers to the relationship between expenditure on housing (prices, mortgage payments or rents) and household incomes. The concept of housing affordability means different things to different people and households, depending on the housing situation. Affordability for home owners relates to purchase and repayment expenses; for renters, it relates to rental expenses [5].
Generally, measurements of housing affordability focus on quantifying housing stress as a proxy for all housing affordability driven outcomes [7, 10]. Based on the OECD’s price to income ratio index, housing affordability in Australia has broadly declined since the early 1980s, and the demand for sustainable, affordable housing continues to grow [11]. This demand puts pressure on dwelling prices, with a particularly adverse effect for low-income households. A number of factors influence house prices, such as interest rates, population growth, availability and release of land, and building approvals; therefore affecting housing affordability.
House prices in Australia have increased substantially in recent decades. However, as shown in Figure 1.4, house price growth has not been uniform across Australian cities. For example, Sydney prices have seen the steepest rises, particularly in the past 5 years, and are the most expensive. In contrast, Hobart has the lowest median house price, currently less than half that of Sydney.