20 March 2011
Newly published OECD research has illustrated the high costs of Australias housing undersupply, revealing that our falling home ownership rates are at odds with international trends. The Urban Taskforces chief executive, Aaron Gadiel, said the OECD assessed home ownership rates in 18 developed countries.
We can see the social cost of Australias severe housing undersupply, Mr Gadiel said.
According to this study, Australia is one of just five countries where home ownership rates have fallen since the 1990s.
Australia is grouped with Greece, Mexico, France and Luxembourg as countries where an increased share of the population cant access a home of their own.
While Australias home ownership level dropped from 71.4 to 69.5 per cent of the community in the study period, home ownership:
¢ in the United States increased from 66.2 per cent to 68.7 per cent;
¢ in the United Kingdom increased from 67.5 per cent to 70.7 per cent;
¢ in Canada increased from 61.3 per cent to 68.9 per cent; and
¢ in Germany increased from 36.3 per cent to 41.
The OECD said that Australias home ownership rate would have declined even further had it not been for our ageing population.
Older Australians are more likely to own their own home, so our changing demographics have propped up the headline home ownerships rate, disguising significant falls in home ownership amongst young and middle aged Australians, Mr Gadiel said.
If the impact of our ageing population was excluded, the OECD concludes our levels of home ownership would have fallen by nearly another one per cent.
While the OECD found that some of the fall in Australias home ownership rates could be explained by the increase in households headed by a single adult, most of the decline was unrelated to demographic factors.
Mr Gadiel said Australia clearly has a problem that is shared by few other developed countries.
Our citizens are losing the ability to have a home of their own, while in other countries more people are enjoying the benefits of home ownership, he said.
Theres no doubt that the underlying problem is Australias national housing undersupply of 200,000 homes.
Our town planning laws, high development levies and lack of urban infrastructure investment, have deprived Australia of the housing we need, he said.
The current situation is unsustainable, but federal, state and local governments havent given this issue the priority it deserves.
In a separate report released last year the OECD observed that a rising share of the population is being priced out of the [housing] market.
Measures should be adopted to stimulate supply, the OECD says.
Supply constraints need to be lifted by streamlining the planning and zoning regulations, the report says.
More transparent, harmonized and less restrictive zoning and planning regulations across jurisdictions are needed.
Rationalizing infrastructure charges with nationally consistent principles would encourage more efficient land use and reduce delays and cost of negotiation between developers and local governments.
Mr Gadiel said that Australias government needed to provide a comprehensive response to the growing home ownership crisis.
The Urban Taskforce is a property development industry group, representing Australias most prominent property developers and equity financiers.
The latest OECD report is available here. (Drivers of Home Ownership Rates in Selected OECD Countries, OECD Economics Department Working Papers No. 849)
