For those who’ve come across the seas, we’ve boundless plains to share….
Australia really has been the lucky country for migrants. While early settlement was harsh, it was rewarding with freedom, land, gold and self-sufficiency on-hand, something unrivalled in Europe or England at that time. Some of that luck remains a big part of the Australian dream; home ownership.
A recent poll by ANU showed that over three quarters of Australians believed that owning your home was part of the Australian way of life. It’s stamped in us as part of who we are. Interestingly, this is not a global belief, other countries have strict government ownership that only allows land lease and many countries in Europe, in particular Germany and Sweden, have vast amounts of affordable rental accommodation with controlled regulations to keep them that way, making renting for life the norm.
Possibly that incredible dream to own your own home is why so many Australians are under mortgage and rental stress at the moment, because it’s not just an ideal to own your own home, it’s a right of passage into adult hood, and an expected norm for couples and families. Psychologically it evokes a sense of confidence and security that comes with the social status of home ownership and feeling of familiarity.
And the dream is more than bricks and mortar. It’s a space we make our own and connect with our personality, our tastes, values and even unique family smell dominate here. It’s also the only time we might be able to let our hair down and be 100% real. We invest in buying our dream home and renovating, modifying and updating it so it continues to keep up with our ever-changing needs and standards.
The chance to buy your own home in the 1800s was rare in other countries, especially England where estate holders and churches left little over for common people. That you could travel to Australia and buy a plot of land was unique and enticing. While that dream still stands, the ease and benefits of home ownership in modern times is not so promising. When we look back on the history of Australian settlement, it’s easy to see why the dream was at one point so obtainable.
Australia is a big continent that is sparsely populated, leaving plenty of land to share around. The initial plan for land ownership was very different to the present system. In 1788, Admiral Arthur Phillip, first Governor of NSW, envisaged that land would be solely owned and held by the government, only land was soon given away to early convicts and retired officers to encourage settlement. Thus the Australian dream was born, people who had nothing to go home to in England suddenly found themselves with land to build on. After that land was subdivided and sold off, with Melbourne leading thanks to the gold rush, but Sydney and Adelaide fast to catch on. By 1830 owning your own land in Australia was a reachable goal, even for relatively poor areas. It’s estimated that by 1881 as many as 44% of those living in Melbourne, Adelaide and Sydney owned their own home, something unprecedented and not seen in any other part of the developed world at the time.
Another unique aspect of Australian home ownership that remains part of the Australian dream is the amount of land you built on. Originally almost all homes were built on quarter-acre blocks, with plenty of room for the kids and dogs to play, as well as a few chickens, maybe some sheep, fruit trees and a vegetable patch along with the Hills Hoist. Home gardens, complete with egg laying hens were common for most Australian families, giving Australians a self-sufficiency unrivalled in other country and allowing cities to spread out rapidly.
By the mid 1970s Australia had opened doors to migrants from all over the world, fleeing war or economic stricken cities, looking for better ways of life and the promise of home and land. At this point home ownership was at a staggering 70 to 75 per cent.
With family dynamics changing and moving into dual incomes the 1980s were also stress free home ownership times that resulted in a rollercoaster of ups and downs for interest rates.
Like a domino effect, in the 1990s, negative gearing came into play and there was a rapid expansion of the rental market. Suddenly home ownership became a profitable passive income and those who could afford to, rushed to build a real estate investment portfolio. With so many rental properties now held by private owners with little price regulation, rental stress became an issue that continues for many families today.
We reach a tipping point now of the new generation. As Millennials get set to take over the market we will see if our Australian dream is changing. For now, homes in Australia are about lifestyle; the creation of memories, the place to raise children and part of who we are. Home is where we spend our free time and leisure and gather to entertain our friends and family.
It does beg us to ask if the Australian dream is one that’s still working. Certainly the old school thinking and advice is to own your home and go into debt, but perhaps more thought and professional advice needs to go into individual circumstances and the ability to make repayments before the dream becomes unobtainable.