Are you truly a homeowner if you're living at your parents' place? It's a question that challenges our understanding of homeownership rates and their impact on housing politics. According to economist Karl Fitzgerald, the traditional homeownership rate, often cited at around 66% in Australia, is misleading. This rate is derived from a census question that focuses on the dwelling's occupancy status rather than the individual's ownership status. As a result, young adults living with their parents, who may not own their own homes, are incorrectly counted as homeowners, inflating the overall homeownership rate.
Fitzgerald argues that this statistical quirk has significant political implications. By misrepresenting the true homeownership rate, the market appears more stable than it actually is. This can hinder efforts to address housing issues, as the urgency for change is not as apparent as it should be. Furthermore, different age groups are being misrepresented, with each generation being told a better story than the numbers support.
The issue is not limited to Australia. A similar study in the United States found that the commonly cited homeownership rate of 65% is based on the owner-occupancy rate, which counts housing units occupied by owners. However, when using a homeowners-to-population ratio, which focuses on individual adults, the actual homeownership rate drops to 53%. This highlights the importance of accurately measuring homeownership to understand the true state of housing markets and to inform policy decisions.
Fitzgerald calls on the Australian Bureau of Statistics (ABS) to publish an official homeowners-to-population ratio from person-level census data. He argues that the ABS already has the necessary information and should make this data available to provide a more accurate representation of homeownership in Australia. By doing so, we can better understand the true homeownership rate and its implications for housing politics and policy.
