Australian Actuaries Intergenerational Equity Index: Spotlight on Real (e)State – Understanding Changes for Home Ownership and Renting
A Report examining the flow-on effects of changing home ownership patterns, including the consequences for lower income Australians and considerations for the Government’s Commonwealth Rent Assistance program.
Decreased home ownership rates, particularly among younger Australians, are contributing to greater competition for rental properties, increasing housing stress and squeezing vulnerable Australians with low incomes out of rental markets.
Led by Actuaries Institute members Dr Laura Dixie, Dr Hugh Miller and Shams Mehry, the report contributes to the broader discussion on housing affordability following the release of Government’s Intergenerational Report.
On ownership, the findings point to delayed entry rather than lower lifetime ownership, if today’s 18-year-olds move into ownership at recent (2022-24) rates over their lifetimes. Under that projection, ownership at age 65 could match levels seen in the early 2000s. However, there are growing gaps between higher and lower income groups.
The analysis also shows the ‘boomerang rate’ of younger people returning home to live with parents has increased markedly since 2001.
"Based on current trends, Australians are entering homeownership later in life but catching up at older ages, although more people are retiring with a mortgage."
— Laura Dixie, co-lead author
On rental stress, recent increases to the Commonwealth Rent Assistance (CRA) have eased the burden for some, but rising costs in the competitive rental market have widened the gap between average annual rent and CRA received, potentially leaving more renters exposed to housing stress.
"With renting becoming more common into older ages and demographics changing, CRA settings may need to evolve to better meet future needs."
— Laura Dixie, co-lead author
The Report compared five illustrative scenarios to the current CRA settings with each designed to direct more assistance towards renters experiencing the deepest housing stress.
"Our modelling found that further changes in policy design could better target support to improve wellbeing amongst the most stressed low-income renters but there are important trade-offs to consider in terms of funding, eligibility and impact. This analysis is a useful starting point for further review."
— Hugh Miller, co-lead author
Actuaries Institute CEO Elayne Grace said the Report highlights that housing stress is concentrated among lower-income households and the depth of stress matters for policy design.
"This research provides valuable evidence to inform policy design that balances immediate housing pressures with the longer-term challenge of improving intergenerational equity."
— Elayne Grace, Actuaries Institute CEO
About the authors
Hugh Miller, Laura Dixie and Shams Mehry
Hugh Miller is a principal at Taylor Fry. For the past 15 years he has been applying actuarial techniques to social sector problems spanning welfare, employment, housing, disability and health. He, along with Laura and Ramona Meyricke, codesigned the Australian Actuaries Intergenerational Equity Index, exploring how wealth and wellbeing differs across time and generations. Hugh was 2021 Actuary of the Year.
Laura Dixie is an experienced actuary and a director at Taylor Fry. She works in Taylor Fry’s Government practice using quantitative analysis applied to a range of datasets to understand how people interact with services in the health, education and social sectors.
Shams Mehry is a consultant at Taylor Fry. He works across government sectors applying his statistical modelling and quantitative analysis skills in a range of health, education and transport contexts.
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