Outright ownership falls over 25 years: ABS

As suggested by the national survey, some of the data of which was released today (28 June), the proportion of Australians who own a home outright dropped from 41.6 per cent in 1996 to 31 per cent in 2021.

However, the number of homes owned outright increased by 10 per cent between 1996 and 2021.

This latest census counted 25,422,788 Australians in its survey.

In 1996, this number was 17,892,423.

Further, in 2016, 2.56 million people owned their home outright, which rose to 2.87 million people last year.

Outright ownership in 2021 was reported at its highest in Tasmania (37.1 per cent) and at its lowest in the Northern Territory (15.8 per cent). 

Speaking of this long-term decline, Housing Industry Association chief economist Tim Reardon said it’s a phenomenon that’s been observed over the last three decades. 

“I’ll flag that as declining homeownership is a trend that we’ve seen over the past 30 years and is an ongoing concern,” Mr Reardon said. 

The same data also noted that, over the last 25 years, the number of Australians who owned a home with a mortgage also reportedly doubled, rising by 96.8 per cent.

Households that owned a mortgaged property rose from 26.2 per cent in 1996 to 35 per cent in 2021.

As of last year, more than 3.2 million people now own a home with a mortgage, with this cohort being at its strongest in the ACT (40.2 per cent) and Western Australia (40 per cent). 

Real Estate Institute of Australia (REIA) president Hayden Groves said in a statement to Mortgage Business that this mortgage trend was of specific interest to those aged 25 and under. 

“The takeout from this – with home ownership levels stable – is that more lending activity is expected in order to achieve the great Australian dream of home ownership,” Mr Groves said. 

“It also reflects that housing affordability is an issue that remains unaddressed by State and Federal Governments.”

In 2021, two-thirds of households (66 per cent) either owned their home outright or with a mortgage. 

In 1996, this figure was 67.8 per cent.

There were also nearly 11 million private dwellings counted in the 2021 census, an increase of over 950,712 compared to 2016.

According to this latest data, these dwellings mostly consisted of separate houses, which accounted for 70 per cent.

Apartments comprised 16 per cent of the total dwellings, while town houses were 13 per cent.

The Australian Bureau of Statistics has also said that the increase of apartments between 2016 and 2021 accounted for almost 31 per cent of the total growth in private dwellings.

Over 2.5 million people, or 10.3 per cent of Australians, are reported to live in apartments.

Speaking at the 2021 Census data release launch, Australian statistician Dr David Gruen AO said there were a number of “interesting patterns” in the data over Australian housing, particularly “in terms of homeownership and the proportion of people who own their home but have a mortgage”.

“That's gone up quite a lot,” Mr Gruen said. “Whereas the proportion of people who own their house home outright has gone down by a reasonable amount.”

Mortgage affordability reportedly increases

But while this data has suggested mortgaged homes increased over five years, their monthly repayments were reported as being more affordable.

According to this latest data, the median monthly mortgage repayment grew from $1,755 to $1,863 over the five-year period. 

However, the number of owners who reported that these instalments accounted for 30 per cent or less of their income increased from 67.3 per cent (1.92 million) to 74 per cent (2.4 million) between 2016 and 2021.  

This trend was also observed in those paying at least 30 per cent – considered by some to be mortgage stress – of their income in mortgage repayments, which dropped from 19.3 per cent (551,753) to 14.5 per cent (468,817). 

The cash rate in August 2021, the month that the 2021 census was conducted, was 10 bps – a record low that began in November 2020.

[Related: Financial regulators on watch for cracks in mortgage market]