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Is it time to give up on the Australian Dream? Picture: NCA NewsWire \/ Max Mason-Hubers<\/p>\n
Australia\u2019s struggle to hold onto the dwindling Australian dream stands in stark contrast to other nations that have built housing systems entirely differently. <\/p>\n
The stranglehold the Australian Dream has on the nation\u2019s society is placing immense pressure as more generations struggle to purchase their own home.<\/p>\n
Australia\u2019s combined ownership rate is 62.7 per cent, according to data from the OECD (Organisation for Economic Co-operation and Development), while the Roy Morgan research shows that 23.9 per cent of mortgage holders were \u2018At Risk\u2019 of mortgage stress, and 15 per cent were ranked \u2018Extremely At Risk.\u2019<\/p>\n
The Australian dream of owning a home is statistically stable, in reality it is harder than ever to achieve and many Aussies have already given the dream a flick in search of a new one as the rate of ownership continues to drop.<\/p>\n
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Ray White Group senior data analyst Atom Go Tian.<\/p>\n
MORE: 33yo quits Aus for Dubai, exposes real costs<\/a><\/p>\n Dark side of living in Bali exposed<\/a><\/p>\n 31yo quits Australia for cheap Italy home<\/a><\/p>\n Ray White Group economist Atom Go Tian has analysed whether Australians should give up on the Australian dream and look to other countries for inspiration of how Aussies can rewire their idea of property, ownership and home security.<\/p>\n \u201cFor most of the twentieth century, homeownership was a social contract available to most in the form of affordable land, accessible credit, a pathway achievable within a reasonable working life,\u201d Mr Go Tian said.<\/p>\n \u201cAs house prices have climbed, the path from renter to mortgaged owner to outright owner has elongated dramatically.\u201d<\/p>\n Analysis by Ray White Group using OECD data. Photo: Supplied<\/p>\n MORE:Aus landlord\u2019s $100k hit in ugly tenant war<\/a><\/p>\n Australia sits in the middle alongside New Zealand, Canada, the UK, and the US. These markets are the \u201chomeownership dream\u201d cluster, yet within that shared dream are differences worth learning from. <\/p>\n So how does Australia\u2019s housing system compared to overseas?<\/p>\n Western Europe<\/p>\n Western European countries like Switzerland, Netherlands, Denmark and Germany have built their housing dream in the opposite way, with between 55-51 per cent of their population renting.<\/p>\n Western Europe offers an interesting alternative to the housing dream. Photo: Supplied.<\/p>\n \u201c(These countries) build their housing systems around renting as a legitimate, long-term stable life choice, not a way station to buying,\u201d he said.<\/p>\n \u201cNot a failure of aspiration but the result of strong tenant protection laws, professionally managed rental stock, historically rent-controlled urban housing, and a deliberate post-war policy decision not to subsidise owner-occupation the way the UK or US did.\u201d<\/p>\n Japan<\/p>\n Japan offers the most radical alternative, according to Mr Go Tian, where residential <\/p>\n buildings depreciate to near zero within 30 years, stripping housing of its wealth-storage function entirely. <\/p>\n A young woman in Kyoto, Japan. Photo: Supplied.<\/p>\n \u201cBecause houses depreciate rather than appreciate, Japan builds continuously. In Tokyo, more housing permits are issued annually than in the entire state of California, yet rents have stayed flat for decades. <\/p>\n \u201cWithout capital gain expectations, there is no political constituency for restricting supply,\u201d he said.<\/p>\n USA<\/p>\n \u201cThe United States is the most instructive divergence,\u201d Mr Go Tian said.<\/p>\n \u201cWhile Australia\u2019s outright ownership rate has drifted downward, America\u2019s has climbed steadily from 21.5 to 26 per cent over the same period,\u201d<\/p>\n The US also has similar housing dreams, but with access to a 30-year fixed rate makes life easier. Photo: Realtor.com<\/p>\n With access to 30-year fixed-rate mortgage, US borrowers lock into a rate for the life of their loan, converting debt into equity on a predictable schedule. <\/p>\n Australia\u2019s variable-rate mortgage culture works in reverse, every rate rise hits every borrower immediately, and low rates historically encouraged equity extraction rather than paydown. <\/p>\n UK<\/p>\n The United Kingdom offers a different lesson, Mr Go Tian added.<\/p>\n \u201cRather than building a private rental market, Britain bifurcated: you either owned or you were housed by the state. <\/p>\n \u201cAs Right to Buy policies sold off council stock from the 1980s onward and ownership became unaffordable for a new generation, there was no adequate private rental sector to absorb the overflow,\u201d he said.<\/p>\n \u201cThe UK\u2019s housing crisis is in part the cost of never having built one.\u201d <\/p>\n A modern building on London, where the UK also face a housing crisis. Photo: Leon Neal\/Getty Images)<\/p>\n Canada and New Zealand<\/p>\n Canada and New Zealand mirror Australia most closely: high mortgage dependence, negligible social housing, and a private rental sector that expanded not by design but by default, claims Mr Go Tian.<\/p>\n \u201cDemand-side interventions like first-home buyer grants and Help-to-Buy schemes temporarily boost individual access but inflate prices, benefiting existing owners and undermining their own goals,\u201d he said.<\/p>\n \u201cThe single most transferable lesson from the OECD data is that countries with functioning housing systems, whether ownership-based like the US or rental-based like Germany, built them through deliberate, tenure-neutral policy sustained over time. <\/p>\n \u201cThe idea of a quarter-acre block may have shrunk, but the dream of a home you can call your own does not have to.\u201d<\/p>\n MORE: Alarming number of Aus landlords abandoning market<\/a><\/p>\n<\/p>\n
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