Very interesting and useful trend analysis - home ownership over a period of over 35 years. It is not surprising that homeownership depends on the income/wealth level. However, this dramatic decrease in homeownership among low-income earners has been the result DESPITE having an ongoing period of over 26 years of recession-free economic growth in Australia. How can this be explained? Does this mean higher/better economic growth relates to increasing inequality/decreasing housing affordability/increasing negative social conditions and lower social sustainability?
http://www.abc.net.au/news/2017-11-29/poorer-australians-bear-brunt-of-rising-housing-costs-charts/9202804?section=business
Hi Chandana - I was interested by this report, too.
Some accessible analysis offered by Jessica Irvine in the Sydney Morning Herald yesterday.....
https://www.smh.com.au/comment/diary-of-a-first-home-buyer-week-11-just-one-in-five-lowincome-young-aussies-owns-their-home-20171201gzx3r2.html
Cultural/sociological trends blend in as well - urban, suburban expansion and/or population shifts from rural to more urban areas that change costs in relation to income; and, of course, income inequality.
The homeownership rate in the US was a stable rate. The choice between tenure--owner and renter mainly, appeared as a great ratio based on the uniformity one observed between official data such as the US Census. It used to change only by external shocks such as refugee impact in special areas such as when Miami Beach was impacted in the past by the arrival of Cuban refugees.
During a period of time in the US for an interval such as you stated, the GOP embarked on a policy to increase the ownership rate, for good reasons such as the attainment of the "American Dream" for more of its citizens. It is what in part fed a housing bubble that lead up to the most recent financial crises that shocked the global economy. The rate did go up (though not by much) during the policy implementation, but it created speculative wealth which did not last. Congress, investigating the crises, found that it was man-made and could have been avoided.
I think that there is a complex relationship. First of all, income inequality does matter. If it grows, less fraction of population remain owners and owners have more than one housing, offering them for rent.
The second aspect is a non-trivial link between urbanization and economic growth. I want to suggest you to look at my recent conference paper, where I decompose total value of housing in a city into total land rent and construction costs. Both contribute to GDP, but contrary to construction cost (which is creation of physical value), land rent component is a collective decision of people to settle in some area, and it does not involve production. In other words, it is much easier to grow without more production, when people cluster in very large cities, where land rent component is the dominant fraction of housing value. My guess about Australia is that its growth was mainly driven by concentration of people in large cities and accompanied by wealth polarization; see http://theconversation.com/income-and-wealth-inequality-how-is-australia-faring-23483 and https://en.wikipedia.org/wiki/Demographics_of_Sydney .
You can read my paper on RG: Conference Paper Aggregate and Average Land Rent in Cities
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