The Melbourne Institute of Applied Economics and Social Research analysed movements from renting into home ownership over the period from 2001 to 2016. It found on average, in any given year of the 2001 to 2004 period, 13.6 per cent of renters moved into home ownership.
However, this rate of movement steadily declined in time. In the 2013 to 2016 period, an average of only 10 per cent of renters moved into home ownership in any given year.
Australians in the 35-44 age group were hit hard by a spike in property prices during this period. They experienced the second-largest decline in the rate of movement into home ownership between the 2001 to 2004 period and the 2013 to 2016 period, falling from 15 per cent to 9.8 per cent.
Only renters in the 18 to 24 age group experienced a bigger decline in the rate of movement into home ownership than those in their 30s and 40s, falling from 13.5 per cent in 2001 to 2004 to 7.6 per cent in 2013 to 2016.
There could be signs of life in the first home buyers market in the coming years, particularly in the capital city markets of Melbourne and Sydney.
Relative to 12 months ago, dwelling values in Australia have fallen across the board – down about 2 per cent since peaking in September last year.
Australia’s largest housing market, Sydney, has seen values fall by 5.6 per cent since peaking in July last year.