Home-ownership in Australian capital cities : with particular reference to Melbourne and Sydney

Home-ownership has long been a characteristic feature of Australian housing. This thesis takes a detailed look at its causes and consequences, paying particular attention to the role of government policy. After a brief introduction, Chapter 2 provides a theoretical background for the thesis based on conventional microeconomic theory. The following two chapters then concentrate on housing choices at the individual level, asking what determines housing tenure, what is the role of policy and how is tenure related to other aspects of housing. As might be expected, the critical determinants of housing tenure and type are marital status and income. At the same time the long-run cost of home-ownership is likely to be lower than that of renting, largely due to government policy, although in times of inflation the cost differential may be reduced. Chapters 5 and 6 then trace the historical growth of home-ownership and improvement in housing conditions in relation to the development of policy. Some of the policies encouraging home-ownership have been the use of savings banks in providing housing finance, tax concessions, the Defence Service Homes Scheme, the Commonwealth-State Housing Agreement and the Rome Savings Grant Scheme. Taken as a whole there is no doubt that these policies have increased the rate of home-ownership and improved housing standards. However the most important determinant has probably been the relationship between incomes and the costs of home-purchase, including in particular the general level of interest rates. The equity implications of these policies are then explored in Chapter 7 while the final chapter asks whether home-ownership should be encouraged at all. There appear to be few objective arguments for supporting such policies