In 2001, 41.4 per cent of people aged between 45 and 54 owned their home outright, but in 2021 just 18.5 per cent of people in that age bracket did.
In both those age groups, more than half now have mortgages while the number of renters has also swelled.
Domain chief economist and researcher Nicola Powell said a simple reason more people had mortgages now than 20 years ago was that they have grown as house prices have skyrocketed.
“We’re extending ourselves more, we’re taking on bigger mortgages, and taking a longer period of time to pay off,” she said. “What that means is people are going into their retirement years with part of their mortgage still hanging over them as an expense.”
Among 55 to 64-year-olds the proportion of mortgage holders in that age group has more than doubled, rising from 15.5 per cent to 35.9 per cent, and the number of people with a mortgage at retirement age or older has risen from 3.2 per cent to 9.6 per cent.
Chris Martin, a senior research fellow at the City Futures Research Centre at UNSW, said some people are using their housing as security and keeping their mortgages open for other purposes, including buying investment properties.
But a large part of the growth in mortgage holders was because house prices have risen, and Martin said successive government policies have helped drive that boom.
Martin co-authored a recent report that found state and federal governments have spent more than $20 billion in the last decade on housing assistance through first home buyers grants and similar policies.
“The general trend is that it goes into higher house prices,” he said.
RateCity research director Sally Tindall said the shift away from outright ownership has not emerged overnight, but it will continue unless property prices fall.
Higher interest rates are bringing the housing market down, which might help some first home buyers, she said.
“If we see the property prices drop as their forecast to do, you will see that that that hurdle will be lowered. But it’s not going to be smooth sailing for first-time buyers,” she said.
Martin said having a national housing plan with state and federal co-ordination will be vital.
“Having a housing policy with the objective that everyone whether they own or rent, should have affordable, secure housing of a decent standard, that should be the objective,” he said.
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