What happened to the Australian Dream and how can we rebuild it?

The story of Australian homeownership is as fascinating as it is instructive. With data stretching back more than a century, the nation saw its pinnacle of homeownership in 1966 when a whopping 73% of housing stock was owned outright or with a mortgage. Since then, the number of homeowners has declined to around 63%, leaving many to ponder: What happened to the Australian Dream?

The Golden Era: 1966

1966 represents more than a statistic; it symbolises a golden era when homeownership was at the heart of the Australian social contract. Just two decades after World War II, the nation was still under the influence of those who had lived through the Depression and the war years. To them, owning a home meant security, a place to raise a family, and enjoy the simple life of Australian suburbia.

At the time, a typical house was a three-bedroom, one-bathroom dwelling on a quarter-acre block. It wasn't luxurious but embodied the Australian ethos of hard work, community, and modest living.

Homeownership rates surged from 56% in 1947 to 70% in 1961, laying the groundwork for the 1966 peak. It was an era of promise and prosperity.

Changing Times: The Decline in Homeownership

Since that peak, homeownership rates have declined by 10 percentage points, which begs the question: Why? The answer lies in the shift in Australian values and social norms. By the early '70s, young Australians were making different life choices—prioritising education, travel, and career over early marriage and homeownership.

The trend was also influenced by increased immigration and a diversification of cultural backgrounds. The proportion of the Australian population born overseas jumped from 14% in 1966 to 29% today, adding further complexities to the homeownership landscape.

Moreover, urbanisation trends have led to a 'great push' towards cities like Sydney and Melbourne, where soaring property prices make homeownership less attainable for the average Australian. Notably, global cities attract young workers and students, creating a demand for apartments and alternative housing options.

What Can Be Done?

A decline in homeownership isn't just a statistic; it's a cultural shift that calls for multi-faceted solutions. It's an issue that demands bold initiatives and should be addressed at all levels of government. Policymakers have a role to play in facilitating homeownership for more Australians, especially the younger generation.

One critical starting point is setting clear targets. If Australia aims to increase homeownership rates back to 73%, it would require transferring a million dwellings from the rental market to homeowners.

Strategies already include first-home buyer incentives, housing grants, and tax relief measures designed to make homeownership more achievable. You can find out more about those by exploring First National Real Estate’s First Home Buyer Financial Assistance eBook. The development of affordable housing projects and an expansion of the built-to-rent sector can also be accelerated to provide a pathway for first-time buyers.

It's also crucial to look at the wider economic factors. Supporting young people through affordable education and job opportunities allows them to enter the property market earlier. Re-evaluating city planning to promote housing diversity could be another game-changer.

Moreover, educational programmes can help people navigate the intricacies of mortgages, interests, and home-ownership responsibilities. A more informed citizen is more likely to make decisions that lead to successful homeownership.

Homeownership remains ingrained in our national psyche

The essence of the Australian Dream may have evolved, but the aspiration for homeownership remains ingrained in the national psyche. While it may be unrealistic to revert to the social and economic conditions of 1966, it's possible to adopt new approaches that align with contemporary values. It's time for all stakeholders, from policymakers to citizens, to rally around a shared vision for the future of Australian homeownership.

A national commitment to this vision could be the linchpin in restoring homeownership rates closer to their 1966 peak. The next census will reveal the path that Australia has chosen. However, with a collaborative effort, we believe the decline can be halted and the dream can be kept alive for generations to come.

First National Real Estate wants everybody to find the right, most affordable home for them. That’s why we put ‘Your Patch’ on our website. Using the latest Census data, we can help you discover the suburbs of Australia that offer the types of housing you’re looking for, to buy or rent, and we share valuable information with you on the average mortgage or rental costs of living in those areas. Find Your Patch here…

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