Australia has seen a growing debate about housing ownership and a claim that older Australians had it easy – and that should be blamed for intergenerational inequity. I am keen to touch on flaws of this claim – I am also keen to draw attention to current Government housing funding subsidies for people interested in housing ownership.
There are Government schemes across Australia put
in place to give people a chance to pursue a dream of owning their own home. At
the moment substantial additional money has been allocated to extra housing
ownership subsidy programs as part of economic stimulus following the COVID
disruption. I summarised resource links at the end of the article.
It has been estimated that some people could get as
much as $69,000 and others up to $45,000 in total if they take advantage of the
COVID stimulus economic housing package and the existing First Home Owners
schemes. That is a lot of money for employed folk wishing to own their first
home.
Clearly there are valid questions about housing
inequality evidenced in homelessness and limited social housing for vulnerable
groups. That deserves a separate article at another time. So now I turn my
attention against the ageist assertions blaming elderly people.
I find it puzzling when I hear commentators
claiming that older Australians managed themselves into home ownership with
less effort. I think really?
First it is not clear which exact older Australian
group they are blaming. Is it the older people now probably in aged care that
missed out on public funded University education? Is it the very older women
who back in the day were legally prevented from public sector jobs the minute
they got married with impacts on lifelong earnings and savings?
Are we blaming the same older Australians who did
not have the right to receive universal compulsory superannuation? We can’t
forget that many Australians had no access to super until mid-1992. As of 1974
only 32% of Australia’s workforce had access to super. And of these only 15%
were females. https://www.aph.gov.au/About_Parliament/Parliamentary_Departments/Parliamentary_Library/pubs/BN/0910/ChronSuperannuation
The point I am trying to make here is that a lot of
those elderly people missed out on other things that we now take for granted
like university education, superannuation, and even Government jobs that once
largely excluded many women!
Many didn’t give up; they build on what they had
and the opportunities that they secured. So to simply blame these people for
vagaries of modern capitalism or the project of neo-liberalism seems to me a
bit of a stretch!!
Then there are plenty of immigrants who came to
Australia since the late 1970s from all over the world, many with nothing more
than a suitcase. Many have toiled in low end jobs. Some have prospered running
market gardens, restaurants, and involvement in mainstream economy. Try telling
these people who worked no end to put food on the table for their families that
they should be blamed for intergenerational inequities. It may not make sense.
I think people could be excused for thinking hey,
we may need more advances in sociological explanations (laugh out loud),
because a sweeping blame on older generations just doesn’t add up.
Specifically on housing, there are any older
Australians who started in fibro housing and others albeit with a brick façade.
Many home owners don’t get a mortgage to buy a house where they could live
forever - they stick with a property for three, five or say 10 years. They
shift to a better house or suburb after building greater equity in the house.
In the past we have regarded building equity in your house as important part of
a saving strategy – the equity allowed you to get an even better place – maybe
another mortgage!
They got another mortgage? Housing was partly seen
as a saving strategy as much a form of upward mobility.
My memory takes me back to the 1980s and 1990s
as house renovations exploded. Holiday time and long weekends were
partly spent by some doing painting projects, doing bathroom tiling and kitchen
upgrades. You needed a bit of money to get improvement supplies. Remember WA
Salvages (before Bunnings) for renovation supplies to make your little place
look a ‘million dollars’? Time invested and work done increased house
value.
People were busy ripping off old carpets and
polishing their timber floors. It all took money, but it increased house value.
A middle aged lady in the housing market once told me ‘she spent money to make
money’ (laugh out loud, but I did understand her logic).
And wow, the amazing house extensions people built on their blocks. Sometimes extensions costed as
much as the original structure. Then the fences that had to be redone, timber
and fibro fences of post-ward era falling, Colorbond and Zincalume were in. Not
cheap.
It will be remiss not to include the home gardening explosion that
improved property values. So much gardening upgrades were made - plants bought
and bartered – swap meet markets for early risers. Landscaping for those who
could afford came in the mix. Time and money always gradually invested to bring
gardens to new levels. And it all helped add value to properties.
Some will remember suburbs that did not have sewerage connections.
You were required to pay to install a new sewerage connection and decommission
old localised tank systems. And you couldn’t legally sell a property till a
connection is done. Talk about cost of living! I know older people who only
made their lifetime trip to Europe later in life. They were happy with local
holidays, but certainly paid their mortgage.
The cost of money as in mortgage interest rates is
also a big factor in talking about cost of housing. Needless to mention that
the 1990s had seen interest rates ranging from 11% to 17%. Looking at comparative
products on banking sites and Government housing loans today they roughly range
from 2% to 4.6% interest. How does this compare to the 1990s 11% to 17%
interest burden?
There are always
risks with getting any mortgage to
own a home. As in the recession of the early 1990s, some people lost
properties. In recent years some well-paid folk in the mining sector lost heaps
of money as property prices crashed and they had to pay or sale properties
valued at much lower than the buying price.
Like any financial undertaking, you can only do
your homework – research what you are looking for and how to get there. Risks
are part of life. But what you can’t do is blame the majority of older people
in society.
It is true though that the pattern of home ownership do indicate some
shifts. But this is a subject that needs to be properly analysed rather than
opt for modern divisive politics of ageism. For what is worth though, some
readers may still be interested in how the home ownership pattern variation
looks like. I have jotted some bullet point I extracted from the Australian Institute
of Health and Welfare data.
Statistical Extract Summary Home
Ownership
- About two-thirds or 67% of Australian residents are home owners
- 32% owned homes outright and 35% had a mortgage
- 32% are home renters
- In 1971 young people 25-29 years of age home ownership stood at 50%, by last 2016 Census had reduced to 37%
- In 1971, 30-34 years of age had home ownership rates of 64%, going down to 50% by 2016 Census – a 14% decrease
- For Australians aged 25–29, home ownership stood at 50% in 1971, decreasing to 37% in 2016.
- Those aged 50-54 experienced a 6.6% in home ownership declining from 80% to 74%. (Source: Australian Government, AIHW, 7 August 2020)
Links
Across Australia
there are various First Home Owner’s schemes and Government loans administered
through State and Territory Governments. In addition, there are now also State
and Federal stimulus subsidy monies to support home buyers that are new to the housing
market. These links offer examples; you research yourself to see what else is
available in your State.
Keystart - Western Australia
Keystart is a West
Australian Government scheme offering loans and only requires a deposit of 2%.
More so, this scheme does not require you to pay a lender's mortgage insurance.
Detailed info as per link: https://www.keystart.com.au/
Western Australia
also runs a specific scheme designed for farmers and rural and regional
business as per link: https://www.keystart.com.au/loans/rural-home-loan
First Home Owner Grant - Western Australia
A
Government payment of $10,000 is available to first
time home buyers. This subsidy can be accessed by citizens and permanent
residents regardless of your level of income. It is intended to encourage
people gain entry into housing ownership and establish their principal place of
residence. Detailed Grant conditions and requirements as per links:
West Australia Building Bonus Grant for New Home - $20,000
The WA Building Bonus
Grant at $20,000 is strictly
available from June 2020 to December 2020 as part of State economic stimulus
measures. The Grant is ‘available to promote investment in the WA
residential market and stimulate jobs in the construction industry’
regardless of your income level. For more detailed info follow the link:
Australian Federal Government Home
Builder Grant $25,000
The Federal Home Builder program offers $25,000 for building or purchasing new homes or undertaking major
renovations across all of Australia. The program is managed through each State
and Territory entities. As this is part of COVID economic stimulus or recovery
measure, the scheme access is restricted to the period June 2020 to December
2020. Here are web links to this scheme:
Homestart – South Australia
HomeStart is a South Australia State Government scheme intended to encourage
people achieve their home ownership dream. It offers a range of loans and helps
you steer away from paying Lender Mortgage Insurance. The scheme is accessible
to citizen, permanent resident or skilled migrant. For more info, see the
program link: https://www.homestart.com.au/
First Home Owners Grant $ 15,000 –
South Australia
This
is for first home buyers in SA ‘which can be put toward your deposit, fees and
charges.’ Details as per link http://www.revenuesa.sa.gov.au/grants-and-concessions/first-home-owners
Queensland First Home Owner’s Grant
This Queensland program only requires 2% deposit and
saves you from making mortgage insurance payments, and there no account keeping
fees. It is accessible eligible Australian citizen or permanent resident. Detail scheme info as per
link: https://www.qld.gov.au/housing/buying-owning-home/financial-help-concessions/qld-housing-finance-loan
Other explanatory program links
Australian Government, Home Builder. Economic Response to
Coronavirus, Fact Sheet: https://treasury.gov.au/sites/default/files/2020-06/Fact_sheet_HomeBuilder_0.pdf
Government of Western Australia, Media Statement: https://www.mediastatements.wa.gov.au/Pages/McGowan/2020/06/Building-Bonus-to-support-economic-recovery-and-create-WA-jobs.aspx
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