This document was added or updated on 07/04/2020.

AUSTRALIANS WHO MOVED FROM RENTING TO HOME OWNERSHIP


KEY INSIGHTS

In 2006, over 3 million Australians (aged 20 years and over) were renting.

By 2016, 42% of those previously renting were living in homes owned outright or with a mortgage, and 49% continued to rent.(1)(2)

Those who moved from renting to home ownership were more likely to:

• be younger
  (median age in 2016 of 43 years compared with 48 years for continuing renters)
• live in a household with more than one income earner
  (63% compared with 35% of continuing renters)
• move suburbs or regions
  (76% compared with 58% of continuing renters).

INTRODUCTION

Housing affordability in Australia has broadly declined since the early 1980s. In 1981, the average house price in Australian capital cities was equivalent to around three years of average earnings. This had grown to over seven years of average earnings by 2015.(3)

Roughly over that same time, we have seen an increased proportion of people renting, rather than owning their own homes. In 2017-18, nearly one third (32%) of Australian households were renters, up from 27% 20 years prior.(4)

Renters are more likely to be under financial pressure, with 29% spending more than 30% of their household income on housing costs in 2017-18. By comparison, 19% of households with a mortgage were spending more than 30% of their household income on housing costs over this same period.(4)

This article draws on the Australian Census Longitudinal Dataset (ACLD) to analyse pathways for people who were living in rented dwellings in 2006. The ACLD uses data from the Census of Population and Housing to create a rich longitudinal picture of Australian society. This article uses data from the three-wave ACLD, which links a 5% sample of data from the 2006, 2011 and 2016 Censuses.(5)


WHO MOVED TO HOME OWNERSHIP

In 2006, there were more than 3 million people aged 20 years and over living in rented dwellings.(6) By 2016, 42% of them had moved into a home owned outright or with a mortgage, and 49% continued to rent.(2)(7)


AGE AND SEX

There were more females renting in 2006 (53%), compared with males (47%). Females were also more likely than males to continue renting 10 years later. 41% of the female renters moved into home ownership, and 51% continued renting, while 44% of the male renters moved into home ownership and 46% continued renting.

People who moved into home ownership tended to be younger than those who continued to rent, with a median age of 43 years (in 2016). The median age of those who continued to rent was 48 years.


CONTINUING RENTERS and RENTERS BECOMING HOME OWNERS 2006 to 2016, Age distribution (in 2016)

Source: Microdata: Australian Census Longitudinal Dataset (cat. no. 2080.0)


EMPLOYMENT

Most people who moved from renting to home ownership lived in a household with more than one income earner.(8) More than half of this group (53%) lived in households where two or more people were employed in 2006 (while renting), and this increased to 63% by 2016 (and they had become home owners).

Nearly 38% of these renters to home owners lived in households with two or more income earners in both 2006 and 2016.

By comparison, just over a third of people who continued to rent lived in a household with more than one income earner in either 2006 or 2016 (35%), and 19% lived in households with more than one income earner in both 2006 and 2016.


CONTINUING RENTERS and RENTERS BECOMING HOME OWNERS 2006 to 2016, Number of employed persons in household (in 2016)

Source: Microdata: Australian Census Longitudinal Dataset (cat. no. 2080.0)


HOUSEHOLD STRUCTURE

This pattern reflects the family structures of households who moved from renting to home ownership. Just over 80% were living in a couple relationship in 2016. Just over half (52%) of continuing renters were part of a couple in 2016, and 39% either lived alone or were single parents.


CONTINUING RENTERS and RENTERS BECOMING HOME OWNERS 2006 to 2016, Household type (in 2016)

Source: Microdata: Australian Census Longitudinal Dataset (cat. no. 2080.0)


INCOME

Related to this, the group who moved from renting to home ownership had higher household incomes than their renting counterparts, with more than half (57%) in households with an income of $2,000 or more per week.(10) Just over a quarter (26%) of continuing renters lived in households with this same income.


CONTINUING RENTERS and RENTERS BECOMING HOME OWNERS 2006 to 2016, Weekly household income (in 2016)

Source: Microdata: Australian Census Longitudinal Dataset (cat. no. 2080.0)


GEOGRAPHIC MOBILITY

People who transitioned from renting into home ownership were more mobile than continuing renters. Around three quarters (76%) lived in a different suburb or region in 2016 compared with 10 years earlier, whereas 58% of continuing renters had moved suburbs or regions.(11)


MORE INFORMATION

The Australian Census Longitudinal Dataset (ACLD) offers unique insight by providing a longitudinal view of Australia by bringing together a 5% sample from the 2006, 2011 and 2016 Censuses.

Further information can be found using the ACLD TableBuilder or DataLab products. For more information about microdata subscription and access refer to the Microdata Entry Page.

Other ABS releases related to this topic:

• “More households renting as home ownership falls”, Housing Occupancy and Costs, 2017-18 (cat. no. 4130.0)
• “Recent Home Buyers”, Housing Occupancy and Costs, 2017-18 (cat. no. 4130.0)
• “Housing Affordability”, Housing Occupancy and Costs, 2017-18 (cat. no. 4130.0)
• Household Expenditure Survey, Australia: Summary of Results, 2015-16 (cat. no. 6530.0)
• Residential Property Price Indexes: Eight Capital Cities, Sep 2019 (cat. no. 6416.0)
• “Population Shift: Understanding Internal Migration in Australia”, Census of Population and Housing: Reflecting Australia – Stories from the Census, 2016 (cat. no. 2071.0)

FOOTNOTES

1. This analysis uses the Australian Census Longitudinal Dataset to explore the characteristics of those who lived in a rented dwelling on Census night in 2006, and then either in a rented dwelling, or a dwelling owned outright or with a mortgage on Census night in 2016. This analysis excludes:
   - people who were away from their usual residence on Census night, as the tenure type of their usual residence is not known
   - people in non-private dwellings, and in migratory, off-shore and shipping Statistical Area 1s (SA1s) on Census night
   - people unlikely to hold decision making responsibility for tenure type (refer footnote (6) for further information).
   
2. The remaining 9% comprised people who moved to another tenure type (including non-private dwellings), or whose tenure type was not stated or unknown.
   
3. “Housing Affordability in Australia”, Dr Matthew Thomas, Alicia Hall, Parliamentary Briefing, August 2016.
   
4. Housing Occupancy and Costs, 2017-18 (cat. no. 4130.0).
   
5. The three-wave ACLD (2006-2011-2016) comprises a representative 5% sample of records from the 2006 Census, linked to corresponding records in the 2011 and 2016 Censuses. Data was then weighted to represent the population that was in scope of the Census for the period 2006 to 2016. For more information, see Information Paper: Australian Census Longitudinal Dataset, Methodology and Quality Assessment, 2006 – 2016 (cat. no. 2080.5).
   
6. For the purposes of this analysis, the population of interest has been scoped to represent people more likely to hold decision making responsibility for tenure type. The population of interest excludes:
   - people aged under 20 years (on Census night 2006).
   - dependent and non-dependent children living at home; and
   - visitors to dwellings (tenure type is collected for place of enumeration and not usual residence).
   
7. Continuing renters may include people who owned a dwelling (with or without a mortgage) which they did not live in themselves. Continuing renters comprise those who lived in a rented dwelling on Census night in both 2006 and 2016. Changes to a person’s tenure type may have occurred between Censuses.
   
8. Two or more employed persons usually resident in the household.
   
9. Other household type includes member of a group household and an individual living with a family.
   
10. Excludes persons where household income was not stated (either partially or in full).
    
11. Living in different suburb or region is based on the Statistical Area Level 2 (SA2) of the person’s usual address on Census night 2006 and 2016. SA2s are designed to reflect functional areas that reflect a community that acts together socially and economically. They generally have a population range of 3,000 – 25,000 persons. For more information, see Australian Statistical Geography Standard (ASGS): Volume 1 – Main Structure and Greater Capital City Statistical Areas, July 2016 (cat. no. 1270.0.55.001).