Housing and Inequality in Australia

Abstract

AbstractIn Australia and many other advanced economies, housing is playing a central role in accentuating and perpetuating inequality. This paper, drawing on primary and secondary data, discusses the various ways in which housing tenure in Australia contributes to wealth and income inequality. It argues that a neoliberal housing policy framework and accompanying financialisation of housing have facilitated a dramatic increase in house prices, the neglect of social housing, and a deepening wealth and income divide based on housing tenure. With respect to wealth, the key divide is between outright homeowners versus low-income private renters and low-income households in mortgage stress. The wealth of outright homeowners has grown substantially in recent decades and many have been able to acquire a holiday home and/or investment properties, thereby intensifying the wealth divide. Approximately a third of Australian households are now locked out of home ownership for an extended period or even lifelong. Housing tenure status also has an impact on the disposable income of households. For example, low-income outright homeowners are invariably in a far better position with respect to disposable income than their counterparts who have large mortgages or are private renters.