Intergenerational transfers and housing tenure – Australian evidence

Abstract

Australia has a long tradition of home-ownership though there is evidence that rates of home-ownership are declining. Anecdotal evidence suggests that older Australians are facilitating home-ownership for younger cohorts through intergenerational transfers. This paper examines the relationship between housing tenure and transfers in the form of bequests and gifts. We find evidence that intergenerational transfers are associated with a higher probability that recipients subsequently transition into home-ownership. For those at the edges of home-ownership, intergenerational transfers potentially play an important role in facilitating home-ownership. Moreover, given the central role of home-ownership for the savings and wealth accumulation of Australians, such patterns may exacerbate existing inequality and potentially undermine the role that housing may play in a broad-based policy of asset-based welfare.