FROM the Unconventional Economist …

“Mass immigration collapses Sydney Melbourne Home Ownership”

‘We all know the drivers: favourable property tax concessions; lower and lower mortgage rates; offshore borrowing; mortgage fraud; demand side incentives and choked supply. 

And into this mess we feed mass immigration with Sydney’s population ballooning by 1.05 million people between 2004 and 2018, whereas Melbourne’s population skyrocketed by 1.3 million over the same period.

The millions of extra people obviously helped drive up demand and property prices, crowding-out young residents and cratering home ownership rates.

Worse, both Sydney’s and Melbourne’s populations are projected to roughly double to 10 million people by 2066, caused almost entirely by immigration.

Until the nation finds the courage to address this it is pointless whining about it.’

CAAN: As for the empty rooms … that allows family members a roof over their head in the event of job loss etc …

Many retirees want to stay in their own patch … have obvious concerns about the quality of ‘new homes,’ and want to leave the family home to ‘their family’ …

Australians need be alert to the threat of a Liberal ‘death tax’ for collecting a pension! Make your objections known to your local MPs and party candidates …

The two charts showing an extraordinary collapse in home ownership in Sydney and Melbourne

Shane Wright
By Shane Wright

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The number of people owning their home outright has collapsed by a third as house prices have soared four-fold over the past two decades, leaving a growing number of older Australians shackled to mortgages as they head into retirement.

In the mid-1990s, almost 44 per cent of people in NSW owned their home outright, but according to the Australian Bureau of Statistics this has now fallen to just 29.7 per cent.

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At the same time, the proportion of people in NSW with a mortgage has jumped by more than 30 per cent, with many of those heading towards their retirement years.

The swing from ownership to mortgage has occurred over the past 20 years as the median house price in Sydney lifted by 460 per cent, even taking into account the recent market softening.

It’s a similar story in Victoria, where in the mid-1990s more than 45 per cent of people were mortgage-free, but now that figure has fallen to just 31 per cent.

Victorians are among the most exposed to changing interest rates, with more than 37 per cent of people holding a mortgage. Two decades ago less than 30 per cent held a housing debt with their bank.

The disappearing Australian dream New South Wales


Median price is for Sydney, overall ownership is for all NSW.

Source: ABS, CoreLogic

Over the same period, the median house price in Melbourne has soared from $126,131 to $806,000.

The Northern Territory has the smallest proportion of people who own their home outright, at just 17 per cent. Among the states, just 27 per cent of residents in Queensland and Western Australia enjoy life without a mortgage or rental payments.

Despite prices falling for the past four years, the median outstanding mortgage in WA is $315,000. The median mortgage in Victoria is $260,000 while it is $265,000 in NSW.

National Seniors chief advocate Ian Henschke said the figures highlighted a hidden problem that was confronting more retirees or those looking to retire.

The disappearing Australian dream Victoria


Median price is for Melbourne, overall ownership is for all Victoria.

Source: ABS, CoreLogic

Not only were more Australians holding debt for longer, the single largest age cohort on Newstart were those aged between 55 and 64, suggesting they were facing severe financial stress.

“There are more and more people who are getting into retirement with a mortgage over their heads,” he said.

“The number of people on Newstart aged between 55 and 64 is increasing sharply. These are people having to access their super to try and get on top of their mortgage because they don’t want to retire with such large debts.”

The eventual financial benefits from getting rid of a mortgage is clear from the data.

The average weekly housing costs for all Australian households in 2017-18 was $311. For those with a mortgage, the cost was $484 while for renters it was $366.

People who owned their own home shelled out just $53 a week.

The hardest hit by the shift into housing debt have been low-income households. In the mid-1990s, the poorest fifth of NSW residents spent less than 21 per cent of their weekly income on housing.


Data from the Australian Bureau of Statistics offers new insights into the changing wealth of households.

Revealed: The households with surging wealth and the households standing still

Now a third of their income is needed to cover housing costs compared to less than 10 per cent for the richest fifth of the population.

The poorest households in Victoria have not endured such a sharp increase in housing costs but they are still paying out a quarter of their income on rents or mortgages. 

Twenty years ago, housing costs accounted for 20 per cent of their weekly income.

NAB senior economist Kieran Davies, in a research note, said debt was now being carried by older people and at a much larger level than in the past.

“Gearing has increased sharply among older Australians, broadly reflecting the changing pattern of home ownership,” he said.

*This week, the Reserve Bank of Australia noted in the minutes of its most recent meeting it believed there was little risk of a lift of house prices on the back of its consecutive cuts in official interest rates.

“A decline in interest rates was unlikely to encourage an unwelcome material pick-up in borrowing by households that would add to medium-term risks in the economy,” it said.

The bureau also revealed there are a large number of spare bedrooms across the nation, with many of those in the homes of people who have cleared their mortgages.

Seventy-nine per cent of households have at least one spare room, a third have two spare rooms, while 13.4 per cent have three or more extra rooms.

Shane Wright

Shane is a senior economics correspondent for The Age and The Sydney Morning Herald.

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