House Rules

More Australians are approaching retirement in the sorry position of being either borrowers or lenders rather than home owners. By Nick Cater

The continuing fall in home ownership confirmed in The Australian Institute of Health and Welfare study this week is concerning for those who understand that importance of homeownership which has public as well as private benefits.

Robert Menzies went to the 1949 election promising to help the “little capitalists” own a home by working with state governments to overcome the housing shortage after World War II. “The best people in this community are not those who ‘leave it to the other fellow’, but those who by thrift and self-sacrifice establish homes and bring up families and add to the national pool of savings and hope some day to sit under their own vine and fig tree, owing nothing to anybody,” he told voters. 

Fewer Australians today have the luxury of sitting under their own vine and fig tree today than they did 20 years ago.

In the mid-1990s, when compulsory superannuation was first introduced, 7 per cent of Australians over retirement age were paying rent and 6 per cent were paying off a mortgage. Today 16 per cent of those aged 65-74 live in rental property and 13 per cent are burdened with home-loan repayments. The picture is somewhat better for the over 75s (6 per cent renters and 18 per cent mortgagees) but the trend is in the wrong direction.

More Australians are approaching retirement in the sorry position of being both borrowers and lenders.

The Government’s review of retirement income is an important step in adjusting to the ageing population. It is important, however, that the inquiry should look carefully at all types of assets, not just superannuation. 

It should attempt to find out if there is a causal link between compulsory superannuation and the ability of workers to take the first step on the property ladder.