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Social Benefits of Home Ownership.

An interesting article by the Real Estate Institute of Australia research officer Evgeniya Hawthorne.

The housing sector plays a crucial role in the Australian economy. While contributing up to $40 billion in taxation revenue each year, it also provides long-term financial and social benefits to homeowners and the community. In Australia, there is limited data available on the non-financial benefits of homeownership. In contrast, a number of studies have been undertaken internationally. It has been found that psycho-social benefits such as personal independence, autonomy, control, freedom from surveillance and security, ultimately may contribute to social outcomes including improved education levels for children, better mental and physical health, higher levels of social connectedness and participation in local community and voluntary organisations.

According to the Australian Bureau of Statistics’ (ABS) 2007-08 Survey of Income and Housing, people renting privately were very mobile, with 87 per cent of surveyed private renters having moved at least once in the last five years. In contrast, only 29 per cent of people who owned their home were recent movers. Remarkably, people owning their home outright were less mobile compared to those with a mortgage. By remaining in their homes for a longer period than private renters, homeowners contribute to the stability of their neighbourhood.

The recently released report by the Australian Housing and Urban Research Institute (AHURI), Housing and Children’s Development and Wellbeing: Evidence from Australian Data shows that there are statistically significant relationships between a range of aspects of young children’s housing and the child’s wellbeing. The study has discovered strong association of housing tenure with children’s socio-emotional wellbeing. Frequent moves and renting, as opposed to owning the home, have been found to have a negative impact on children’s social and emotional wellbeing.

In the US, a number of studies have found that homeownership makes a positive impact on educational achievements. Findings included: young children of homeowners tend to have a higher level of achievement in maths (9 per cent higher) and reading (7 per cent higher) and fewer behavioural problems (1 to 3 per cent lower); the decision to stay in school by teenage students is higher for those raised by home-owning parents compared to those in rented households (the dropout rate was 2.6 per cent lower than renters’ children); daughters of homeowners have a much lower incidence of teenage pregnancy (5 per cent lower); and changing schools negatively impacts children’s educational outcomes. In Australia, the ABS shows that housing outcomes are associated with education for both the Aboriginal and Torres Strait Islander and non-Indigenous populations. Higher levels of Indigenous household ownership and lower levels of overcrowding appear to be strongly associated with higher levels of education for the Indigenous population. However, this association is not as strong for the non-Indigenous population, where rates improve only slightly with higher levels of education.

Another AHURI study, based on information from the ABS 1995 National Health Survey, investigated the extent to which housing tenure contributed to inequalities in health in Australia. The study found that compared to homeowners, renters were significantly more likely to report fair or poor health status. They reported a significantly higher average number of serious health conditions and were more likely to visit a doctor. Renters and homeowners with a mortgage were significantly more likely to be smokers compared to those who owned their home outright.

A number of international studies discuss reasons for homeowners being both less likely to be victims of or commit crime. It has been found that homeownership significantly reduces criminal activity with not only higher homeownership rates leading to lower crime rates but also the rate of criminal activity increasing significantly slower in areas with high homeownership rates. AHURI has found that low income housing areas and public housing estates in particular, tend to have a higher incidence of crime and a disproportionate concentration of those with criminal records.

Homeowners tend to be more involved in their communities than renters. International research has found that homeowners are more politically active than those who rent, with homeowners participating in elections more frequently. It also has been found that homeowners are more likely to be engaged in volunteer activity. National and international research confirms that promoting homeownership is socially desirable. Non-financial benefits should not be taken for granted in order to achieve a high level of social cohesion through homeownership.


This article is brought to you by REIA Research Officer, Evgeniya Hawthorne.

Evgeniya can be contacted at evgeniya.hawthorne@reia.com.au