The proportion having paid off their mortgage has fallen from 40% to 30%.
The proportion renting privately has climbed from 20% to 27%.
The response was a series of measures designed to look as if they would help people buy their own homes.
Shuffling the queue
On examination, each measure is less than it could be, although each helps some people more than others.
Usually first home buyers with less than a 20% deposit need to pay lenders’ mortgage insurance.
Under two of the schemes they can effectively get this cost met by the government.
Both are only open to single applicants with annual taxable incomes of $125,000 or less. Couples have to earn $200,000 or less.
They add to demand for housing but not its supply.
Not quite helping those most in need
This means that while the schemes assist (doubtless worthy) people buy homes, they do it at the expense of others who miss out.Twin Sails/Shutterstock
They shuffle rather than shrink the queue.
A separate measure since closed, HomeBuilder, awarded grants for the construction of homes, but it was also available for knockdowns, rebuilds and extensions rather than being directly targeted at increasing supply.
Only 5% of private renters, and 7% of single parents, have enough savings to enter the housing market, even with the promised mortgage insurance guarantee.
Young urban professionals
Of these, more than 85% would then be paying more in servicing costs than they currently pay in rent, even at today’s historically low interest rates.
They might not regard this as an improvement in affordability.
In any case, it wouldn’t be the poorest households being helped.
Our calculations suggest the poorest fifth of households would be unlikely to have enough savings to use the deposit insurance schemes.
Those most likely to use them are on higher incomes but still renting. They include young urban professionals in the eastern and northern suburbs of Sydney.
The blue areas on this map show the regions with the most households who might benefit.
- ^ bolder claims (ministers.treasury.gov.au)
- ^ 66% (www.abs.gov.au)
- ^ 11% (theconversation.com)
- ^ First Home Loan Deposit Scheme (www.nhfic.gov.au)
- ^ Paying off a home loan used to be easier than it looked. It's now harder. Here's why (theconversation.com)
- ^ Family Home Guarantee (www.nhfic.gov.au)
- ^ First Home Owners Grant schemes (www.smh.com.au)
- ^ HomeBuilder (treasury.gov.au)
- ^ knockdowns, rebuilds (treasury.gov.au)
- ^ survey (theconversation.com)
- ^ calculations (stinmod.canberra.edu.au)
- ^ NATSEM (www.governanceinstitute.edu.au)
- ^ HomeBuilder only makes sense as a nod to Morrison's home-owning base (theconversation.com)
- ^ NATSEM (stinmod.canberra.edu.au)
- ^ price caps (www.nhfic.gov.au)
- ^ downsizer contributions scheme (www.abc.net.au)
Authors: Yogi Vidyattama, Associate Professor, National Centre for Social and Economic Modelling, University of Canberra