Data shows declining home ownership rates, particularly among younger Aussies
Australia is moving towards a “rental-first” housing model, with more households renting for longer and fewer able to make the transition into ownership, according to new analysis by Colliers.
The latest Capital Markets report from the firm highlights vacancy rates below 2% and high entry prices as key barriers for first-home buyers, reinforcing a structural undersupply of housing and sustained pressure in the private rental market.
“Investor confidence is driven by both the outlook for a continued structural undersupply of new housing to meet the needs of a growing population as well as more residents needing to rent for longer as house prices remain high and entry to ownership being constrained,” said Robert Papaleo, head of living residential at Colliers.
He said vacancy below 2% signalled “robust rental demand, price resilience and long-term occupancy stability.” Low vacancy rates mean rental stock remains close to fully occupied, with strong competition for available dwellings and limited flexibility for tenants looking to move or negotiate.
Papaleo (pictured right) noted that more new households are renting for extended periods relative to previous generations because of financial constraints and high initial purchase costs, with build-to-rent now established as a permanent segment of Australia’s housing system.
Katherine Sundermann, senior lecturer in urban planning and design at Monash University, said the pattern of increased renting appeared to be a lasting feature of the market. “There is clear evidence that Australians are renting for longer,” she said. “We’re seeing lower levels of home ownership at the same stage of life compared to previous generations.”
Census figures show the national home ownership rate has fallen from about 70% in 2006 to 67% in 2021, with more pronounced declines among younger age cohorts.
Sundermann said the consequences of this shift extended beyond tenure. “Home ownership remains a major driver of wealth accumulation in Australia,” she pointed out.
“A recent report suggested around 40% of first-home buyers receive financial help from family. That dynamic risks exacerbating inequality, as access to ownership increasingly depends on family wealth.”
She added that the private rental sector itself offered limited certainty, particularly in Victoria, where typical tenancy duration is about two years. “That means many renters are moving frequently, sometimes every year,” Sundermann said. By contrast, renters in Germany and Switzerland often stay in the same dwelling for eight to 12 years, providing greater security for households and communities.
However, that pattern is shifting, with more Australians renting for longer and fewer able to buy a home because of mounting barriers to ownership.
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