Explanations for the decline in ownership rates among younger Australian households can be broadly categorised into demand driven by social and demographic factors or by institutional and economic factors, said Judith Yates, honorary associate professor of economics at the University of Sydney, in her submission to the federal government Standing Committee on Economics Inquiry into Home Ownership.
The inquiry will report on issues such as demand and supply drivers in the housing market, the impact of current tax policy at all levels, and opportunities for reform.
Ms Yates also suggested the decline can be driven by supply factors that affect “the structure of Australia’s urban housing markets”.
Superannuation savings, given their significant tax concessions, present households with a vehicle for long-term savings that is almost as beneficial as home ownership, according to Ms Yates.
“As such, it reduces the incentive to invest in home ownership,” she said.
Ms Yates also pointed to housing-related inequalities that Australian institutions could potentially address.
“One institutional change that might discourage older established households from using debt to increase their investment in owner-occupied or investment housing, or from assisting their offspring into home ownership, could be to require superannuation payouts to be taken as an annuity rather than a lump sum,” Ms Yates said.
“This could reduce the scope those close to retirement have for double-dipping on government retirement income support."