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How Australians Came to Love Property Ownership

In the USA, home ownership is said to be part of “the great American dream,” but in Australia, over 75% of Australians, in a recent poll, viewed home ownership as part of the “Australian way of life.” Property ownership is not just a dream but considered a normal part of life here.

How did we come to love property and make home ownership a part of our way of life?

In early white settlement, house and land packages were rewards for free settlers favoured by the governments. Later, home ownership was a way for freed convicts to be accepted by society.

Then came the gold rushes and many a successful prospector was able to afford, at least, a basic cottage. In the gold rush era, at times only people who owned a home were allowed to vote.

After World War II, Australia launched a massive immigration program, believing Australia must “populate or perish.”  Waves of immigrants were welcomed from the United Kingdom and Europe, all looking for a better life.  Many of these new Australians came from countries where home ownership was an impossible dream, but they saw great opportunities here, worked hard and were often able to buy their own home and subsequent investment property.

The late 1940’s to the 1970’s era generated the ‘Australian Dream’. Home ownership levels during this era reached in excess of 70 per cent. However, this era was a function of a certain window of opportunity that has now closed and is unlikely to reopen.  Australia, along with practically all other developed economies, is finding levels of home ownership have peaked and appear to be in decline.

Today, most Australians strive to own a home as early in their lives as possible. We are well known for owning and renovating our own homes. It may surprise you to know that we are not ranked at the top of the list of countries for high home ownership. Among the countries surveyed by the OECD, Romania and Croatia are at the top with ownership rates above 90%, while Australia is in 27th place (out of 37 countries surveyed). The Australian Bureau of Statistics data shows Australian household ownership at 66%.

Property purchases made by owner-occupiers and investors have long been regarded as being, “as safe as houses”, pardon the pun. Australians are very active in purchasing real estate for investment purposes compared to some other countries. Close to 2 million Australians own one or more investment properties and consider their investment properties to be a source of long term and sustainable income.  Some younger Aussies have investment portfolios of 10 or more properties.

Brand new houses, townhouses and apartments are often purchased for investment purposes because they offer greater taxation incentives, usually have lower maintenance costs and are often strategically located in easily accessible, amenity rich areas, all of which promotes capital growth and a strong, sustainable income, which is a means to grow personal wealth – a few sound reasons for our continued love of property ownership.

 

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