Soon, more than half of Australian adults won't own their own home.

It's a depressing statistic, because it challenges Australia's much cherished (though quickly disappearing) ideal of egalitarianism and risks dividing society into the haves and have-nots.

In 2002, 57 per cent of adults were home owners, and this proportion had fallen by 5.3 percentage points by 2014, to 51.7 per cent, according to a comprehensive study of Australian households.

"It is likely that in the next few years less than half of adults will be home owners," write the authors of The Household, Income and Labour Dynamics in Australia Survey.
In some ways this is no surprise, with the median house price in Sydney for instance, above $1 million.


Of course, not everyone who doesn't own a home necessarily wants to buy a house or to buy a house straight away - 18 year olds are busy doing other things and some people prefer to rent.

But home ownership is still an aspiration for the vast majority of Australians and one that will be increasingly frustrated, to the cost of the broader society.

Owning a house is still the way that most Australians accumulate wealth.

Some 58 per cent of total household wealth in Australia is in property, most of it from owned homes but also from investment property. The fact that half of Australian adults no longer own a home means that half of the population is cut out of the major source of household wealth.

Those who can't get into the property market will increasingly be left behind, paying rent and struggling to ave for a home deposit as those already in the market get richer.

Home ownerships is also the key determinant in the material quality of a person's retirement.

A superannuant's income can quickly be eaten up with rent, while those with family homes can sell them and move into smaller homes or units as they age, providing extra income for retirement.

It's also good for the community - people who own homes are generally better connected to the community that those who don't.


As more Australians are cut out of the property market, those who are already in it are increasing their property wealth. Some 13 per cent of Australians own investment housing.

Overall, Australians are getting richer. Median household wealth (taking into account the effect of inflation) increased by 37 per cent to $407,765. Interestingly, almost all of that growth occurred before the global financial crisis.

Over that period, wealth inequality appears to have decreased a little. The household wealth of the lowest 10 per cent increased by 76 per cent, while the wealth of the richest 10 per cent increased by a much lower 43 per cent - albeit from a much higher base.

However, as more and more Australians are cut out of the housing market, this trend is sure to reverse.

With even ordinary homes out of reach for most people, the key path to home ownership will become inheritance. Housing wealth will be passed down through the generations, leading to intergenerational structural inequality.

The HILDA survey contained some bad news single people.

Those who had partners in 2002 and in 2014 had a median increase in net wealth of $272,973 over that period. The wealth of single people increased by just $51,868.
The good news for single people is that it's not too late. The net worth of those people who didn't have a partner in 2002 but had acquired one by 2014 increased by almost as much, $266,534.

The worst off were those who had a partner in 2002 but didn't by 2014. Their net worth increased by just $6,299, so perhaps Tennyson was wrong when he said "Tis better to have loved and lost than never to have loved at all."

The report's authors postulated their wealth and partnership findings might be related to different stages of life for single and married people.

"Partnered people are more likely to be in the 'wealth accumulation' phase of life than are single people, many of whom will be relatively young (and will indeed go on to partner) or relatively old (and running down their wealth)," they wrote.

The rocketing property prices have changed the wealth dynamics of Australia.

The wealth of the typical Australian household headed by a person aged over 65 grew faster than any other age group between 2002 and 2014, to $656,000, the HILDA data shows. About 80 per cent of households headed by a person aged over 65 own their own homes.

The rapid increase in wealth is partly due to the fact that they've been in the property market for so long and partly due to very generous tax concessions for retirement savings introduced about 15 years ago (since wound back, now that the baby boomers no longer need them).

The generations which follow aren't so lucky.